What are Chicago’s financial exchanges selling at Blackhawks games?
Hockey fans are used to watching their favorite teams skate and stick-handle inside a ring of corporate logos.
At the United Center, brand-building on the sideboards extends beyond fast food, insurance and light beer to another arena that’s long been part of the city’s identity: trading. The city’s two major exchange companies, CME Group and the Chicago Board Options Exchange, advertise rink side along the likes of McDonald’s and Dunkin’ Donuts.
No doubt corporate sponsors will reap substantial exposure Wednesday night, when the Blackhawks host the Boston Bruins in Game 1 of the Stanley Cup finals. What’s less certain is how much additional benefit a futures or options exchange stands to gain from such arrangements.
In fact, the benefits can be difficult to quantify for any business.
Any sponsor gains from an association with a “championship-caliber property” like the Blackhawks, according to Kent Thomas, senior vice president of business intelligence and consulting at rEvolution Marketing, a Chicago-based sports marketing consultant.
Sponsor brands “share in the established equity of the team, thereby increasing the perceived value of their own brands,” Thomas said. Something like the Stanley Cup Finals creates millions of additional impressions — the number of people who see a brand at the game or on TV.
“While the actual value and influence of these impressions alone can be debated, the glow of aligning with a winning team can inspire consumers, business owners, trade partners and employees alike,” Thomas said.
Still, it’s one thing to encourage viewers to run out and buy a Big Mac. It’s another to get them to buy a $100 call option on McDonald’s shares.
The CBOE-Blackhawks pairing began in 2008, when the exchange became a “presenting sponsor” with the team. Naturally, the agreement includes a trading component, with two “CBOE seats” on the glass at center-ice auctioned online to the highest bidder before each game. (Stanley Cup tickets for seats in that area are listed at $865 each on the Blackhawks website.) The same year, the exchange struck a similar agreement with the Chicago Cubs to auction CBOE-sponsored front-row seats at Wrigley Field.
On the Blackhawks website, the CBOE ticket auction section notes that trading options “is similar in many ways to the auction process you are currently experiencing,” and adds that “maybe that’s why millions of new investors have started trading options just in the past few years.” (Options grant the right, but not the obligation, to buy or sell an underlying asset, such as a share of stock or a futures contract.)
CBOE declined to say how much it spends on or receives from its Blackhawks sponsorship. The company reported $5.3 million in advertising expenditures last year, including those for local professional sports organizations, and total operating revenue of $512.3 million.
Thomas said he “would be surprised” if any single CBOE deal with a Chicago sports franchise fell outside of a range of $500,000 to $1 million a year in rights fees.
That can be money well spent in gaining inroads to affluent decision-makers — who, thanks to ever-rising ticket prices, clearly fill a substantial portion of seats at a Blackhawks game. But that’s only part of the battle in trying to close the deal with the target audience, Thomas said, noting that simply the appearance of a corporate logo on TV can be “far overvalued.”
Investment-related companies and others typically have “long and complex” sales cycles, and “must put forth more effort than typical consumer brands, to get the end business results that justify the sponsorship,” Thomas said. “It’s not hard to see that selecting a method of investment is a much more complex process than deciding what brand of soda to buy.”
Read what Blackhawks owner Rocky Wirtz has to say about the lockout and winning fans’ trust in our interview from earlier this year.
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