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Motorola Ends Headset Sponsorship With NFL

Crain's Chicago Business, April 17, 2012

By John Pletz

After 13 years, Motorola's logo won't be stalking the sidelines of the NFL anymore.

The Libertyville-based phone maker isn't renewing its sponsorship with the league, which ended with this year's Super Bowl.

"After careful thought and consideration, Motorola Mobility determined that it is in the company's best interest not to renew our sponsorship," a spokeswoman said. "Motorola sincerely thanks the NFL for a collaborative and productive partnership."

The company declined to say whether it decided not to seek an extension or couldn't come to terms with the league on a deal. The NFL, which hasn't yet signed a new sponsor, also declined to comment.

The sponsorship, which put Motorola's bat wing logo on the headsets worn by NFL coaches, was estimated to cost $40 million a year.

"In the scheme of things, it's a very expensive marketing play," said Jim Andrews, a senior vice president at Chicago-based IEG LLC, which advises companies on sponsorship marketing.

One problem is that while Motorola Mobility Holdings Inc. was the wireless telecom equipment sponsor, the NFL also has a deal with carrier Verizon Wireless.

"It's a cluttered environment for handset makers to stand out," Mr. Andrews added. "Headset branding ... that is not as compelling as 'I want Verizon, so I can get NFL RedZone on my phone.' For $40 (million) or $50 million a year, I'd question the (return on investment) for that amount of money."

A lot has changed since Motorola inked its first deal in 1999 for $20 million, according to news reports at the time. The company was then the No. 2 phone maker with 20 percent market share; today it's ninth with about 2.41 percent.

"It was a good deal for them in the beginning," Mr. Andrews said. "I'm not sure it's as valuable at the end. The brand is not the same brand it was eight years ago when everyone had to have a Motorola Razr."

Since then, the company has been through two spinoffs, including last year's breakup that separated the phone and cable set-top units from the Schaumburg-based businesses making police radios and bar-code scanners.

Motorola Mobility, the phone business that kept the consumer brand that had the relationship with the NFL, is being purchased by Mountain View, Calif.-based Google Inc. It's not clear what role, if any, Google played in the decision. The transaction hasn't closed, and Google has indicated it intends to run Motorola Mobility as a separate company.

While Motorola was the 16th biggest spender among U.S. consumer brands on sponsorships from sports to concerts — at $55 million to $60 million a year, according to IEG data — Google spends almost nothing on sponsorships. "They (Google) haven't had to," Mr. Andrews says.

Motorola hasn't abandoned sports sponsorship. It signed Bubba Watson as a pitchman for its MotoActv, a GPS-enabled device for golfers, just a couple of weeks before he won the Masters.