DETROIT, Jan 14 (Reuters) - Continental AG's <CONG.DE> U.S. tire operations has signed a multiyear, multimillion-dollar deal to be the official tire sponsor of Major League Soccer in the United States.
The high-income demographics of MLS fans is the perfect target and the sport also will allow Continental to tap into a Hispanic fan base that eventually could help boost sales in Latin America, Matthias Schonberg, CEO of Continental Tire for the Americas, told Reuters.
"We are a ... very conservative company, very much profit oriented and we would not do this if we wouldn't see payback," he said. "The payback for us is getting new customers and bringing our brand around."
The German parent company already sponsors FIFA, which hosts soccer's World Cup tournament.
"With MLS, we continue what we've been doing worldwide with soccer so there's a certain logic," Schonberg said. "It's a fast-growing sport."
MLS will begin its 15th season in March, and is adding its 16th team in Philadelphia. The league plans to add two more teams in Portland and Vancouver next year, as well as another two within five years.
Continental, which competes with Goodyear Tire & Rubber Co<GT.N> and other tire makers, is the league's 18th sponsor, joining such companies as Anheuser-Busch InBev NV <ABI.BR>, AT&T Inc <T.N>, PepsiCo Inc <PEP.N> and Visa Inc <V.N>. MLS also has jersey front sponsors for 11 of its 16 teams.
"They have a long heritage and history with soccer," said Kathy Carter, executive vice president for Soccer United Marketing, the marketing arm for MLS. "We're excited to continue the momentum that we have."
Under the terms of the deal, Continental gains the right to use MLS league and team logos in its marketing. Financial details were not disclosed, but a person familiar with the terms who asked not to be identified said it was worth low to mid-seven figures on an annual basis.
The deal does not cover the Canadian market, which is being negotiated separately.
The sponsorship also provides signage at each U.S. stadium, 30-second ad spots in national TV broadcasts, visibility in game programs, placement on the MLS web site and hospitality suites in some markets.
Continental's U.S. unit, which is based in the Charlotte suburb of Fort Mill, South Carolina, markets two brands - General Tire and the premium Continental brand covered under the MLS deal. The company also recently signed a sponsor deal with several Grand Am sports car races for the Continental brand, which in the past mostly sponsored local events and groups including University of North Carolina sports teams.
Schonberg said the two sports deals will give Continental national coverage as it works to strengthen ties with the 2,300 or so U.S. dealers that sell its tires as well as consumers who buy the company's products in the replacement market, which accounts for the majority of its sales volume.
Continental's U.S. unit, which employs almost 4,000 people, has seen double-digit growth in its replacement tire business over the last three years, he added. (Reporting by Ben Klayman; editing by Andre Grenon)
Author: Ben Klayman
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