Beware Sponges Filled With Cash…And Other Lessons…

Last year the brand of choice to fill displaced inventory on television and in stadia around the country was Spongetech. Their giant signs were splashed acroos all of MLB, their patches showed up on the NF.s.Hard Knock. show on Bengals jerseys, they appeared along the dasher boards at Madison Square Garden. Spongetech, and their pre-soaped sponges, appeared to be the cure-all for every team salesperson. They helped balance budgets and create some buzz and all appeared grand.

So le.s fast forward to today. Spongetech is under investigation by the SEC, hosts of teams and events have unpaid bills, and the brand, like its sponges after too much use, appears to have dried up and will go away. So what is the lesson to be learne. The blame really ca.t go on the sales teams, which are scrambling to make every dollar possible in a challenged economy. If a partner comes along with big projections and big promises and writes that first check, they ca.t be to blame. However what is at stake is the risk of reputation for organizations over the long term, and the inherent value of a partner who may take whatever comes along just to make ends meet. Now there is no doubt that teams have had to be more creative to show ROI, and that is probably a good thing.

We have talked since we started this blog about the best practices of minor league teams and how they constantly find unique value and opportunities for brands to activate with them. Their budgets and overhead are less, sop they can probably be more creative when finding ways to engage. The issue with Spongetech speaks to a bigger question for teams and their brand management. Is there a need for more accountability or gatekeeping for specific teams looking to uphold strong reputations in the community and to their sponsors. In recent years, the US Open would turn away a host of second tier sponsors, even those with money. Yet recently Spongetech and other brands that would not fit the.imag. of the Open would make their way courtside. Now it could be that yes the dollar has forced teams and events to lower the standard a bit, and open the doors to brands that are very strong and good marketers that would never have made the cut in prior years. Dollars are dollars. However it is that same argument that kept tobacco money in sports for years before the Federal government and public pressure forced teams to drop big spending tobacco brands as sponsors.

The Spongetech situation does pose an interesting one for teams as to what is the level of credibility and accountability that a team wants associated with its marks for a season, especially in a public forum like television or in a stadium. It is a different argument from the one leagues have made to keep uniforms in the United States pristine from advertising (although that is changing with the WNBA and MLS especially, and practice jersey patches in other leagues now). The argument for a gatekeeper with questionable brands is perhaps a bigger issue, as the sting of unpaid bills or poor sponsor activity for the sake of a dollar could have much larger negative effects than placing a legit partner who is willing to spend and activate on a jersey.

It all makes for interesting and challenging times now more than ever, and a slope more slippery than any pre-suds filled sponge could ever prepare..