now this is an interesting topic for me — a perfect blend of branding, baseball and connecting back to hometown roots in one discussion. the free agency of the new york yankees’ derek jeter is focusing business executives once again on an increasingly important and confounding question — what is a brand worth? in jeter’s case, there are further complications in play due in part to declining production on the field beset against his incumbent status as team captain. yankees ownership seems to be looking at what it can measure readily for its offer. espn examines same below.
hal steinbrenner, son of george who drafted jeter and inserted him as captain, has characterized the upcoming negotiations as “messy” because the yankees are “running a business” after all. this is code talk at its finest — and it surely tips their hand on the matter. they’re squarely not in the “brand has significant value” camp. they see diminishing performance primarily and value his other attributes as secondary or tertiary assets. they’re hesitating because they don’t know how to place a value on the brand asset. they are not alone. what’s a little odd is that these are the same people who brought us yankees entertainment and sports network (yes) and won’t update the team’s establishment uniforms (while competitors are refreshing). both are significant brand investments.
so what is the thinking in play behind team jeter’s case? jeter is immensely beloved by fans, teammates and opposing players because of how he handles himself. he is understated and appropriate when the spotlight is on him, which makes him very likeable. this is the foundation.
“he is the brand,” said st. louis blues interim ceo mike mccarthy, the former madison square garden network (msg) chief when it held the rights to yankees’ game broadcasts. from his unique position, jeter adds premium value to the yankees and the yes network — both estimated to be worth more than a billion each — especially as he becomes the first yankee ever with 3,000 hits in 2011. “if he does it in a minnesota twins uniform, the whole thing is half, if not less,” mccarthy said. the yankees will make additional money by selling out the almost always full yankee stadium and from higher tv ratings. good luck finding someone who will speculate on just how much these are worth beyond the additional ticket sales.
front offices and fan bases get very attached to players and think they could never do without them, 99 out of 100 times that turns out not to be the case. payers come and go, it feels like you will never survive the attachment to a certain athlete and then a fill-in comes along and life goes on. then you have a different category, which would be the ‘derek jeter category,’ where you can’t even picture the team without him or him in another uniform. it’s akin to putting the rolling stones together without mick jagger. you can’t do it. even after the sponsorship impact, he goes beyond the metrics. he is the brand.”
so why not focus on the value of the yankees brand as a whole? at the time of long-time owner george steinbrenner’s death, the last estimate stood at $328 million, or 21% of the team’s $1.6 billion team value.
marc ganis, president of sports corp limited, points to the huge risk that the yankees took with jeter under his previous contract. if jeter had gotten hurt or underperformed, he would have been paid regardless. the fact is, most agree is did perform at or above expectation. ganis, who has done work with the yankees in the past, admits there is a uniqueness to the jeter-yankee relationship. “he has tremendous value, but it is very hard to quantify. it’s almost impossible to do. he is worth more to the yankees than any other team. The yankees are worth more to him in endorsements than any other team.” according to ganis, jeter has millions of dollars worth of endorsements from gatorade, jordan brand, gillette, and ford. if jeter remains with the team, then it’s envisioned that his commercial brand will last the rest of his life.
he becomes the arnold palmer of baseball. he provides a direct link to the great yankees past and its future.
sounds like the yankees and jeter have a real fight on their hands. also sounds like it wouldn’t be half the fight if the steinbrenner camp was entering the discussions with a slightly different perspective.
