Visa Inc. (V), which owns the largest credit-card network, said today it has renewed its sponsorship agreement with the National Football League for five years. The agreement extends Visa's alliance with the NFL through the 2014 season.
Though Visa advertises with other leagues, its deepest relationship is with the NFL. A sponsor of the league since the 1995 season, Visa will be the exclusive payment service for the NFL and all official NFL events. Terms of the transaction were not disclosed. There are about 20 corporate NFL sponsors, said an NFL spokesman.
Sports sponsorships like Visa's are a decent barometer of economic health. Companies unsure about their prospects cut their ad spending on pro sports, because they can't justify the return on investment to their clients. Sentimentality plays no part. "Every deal that we we undertake is evaluated on its merits," Michael Lynch, head of Visa's global partnership marketing, tells DailyFinance. "The NFL has demonstrated value to us over the years."
Visa's decision contrasts with one by Anheuser Busch InBev (BUD) not to sponsor an LPGA tournament in Virginia (although an executive told Sports Business Journal in September that the company remains committed to women's golf). Last year, Johnson and Johnson (JNJ) ended its sponsorship of the International Olympic Committee, valued at $100 million. American International Group (AIG) said in January that it would discontinue its jersey sponsorship of Manchester United, three months after deciding not to renew its sponsorship of the world's most famous sports team, according to Reuters.
The fortunes of Visa are improving as the economy shows signs of improvement. Shares of Visa, based in Foster City, California, are up more than 40 percent over the past year. The company posted better-than-expected second quarter results in April. "This is somewhat of a buyers' market today," Lynch says. "There are opportunities to make sure that you get the right value for the investment." Lynch would not say whether that comment alluded to Visa's deal with the NFL.
In the early stages of the season, ratings for NFL games posted strong ratings over a year earlier. Other sports, including baseball, also are showing ratings gains, indicating that fans are turning to pro sports to escape their economic worries.
Under terms of its NFL agreement, Visa will enjoy a host of new benefits, including top-tier sponsorship of the NFL Draft and NFL Kickoff. And Visa and the NFL will share a cobranded online marketing portal on NFL.com, which will grant Visa Signature cardholders access to exclusive NFL experiences.
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