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The Game Plan for Growth in Sports Retail, Featuring the NFL

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The Game Plan for Growth in Sports Retail, Featuring the NFL That Makes Cents Season 2: Episode 2 March 2021 The game plan for growth in sports retail, featuring the NFL Host: Bobby Stephens, principal, Deloitte Consulting LLP Guests: Joe Ruggiero, senior vice president and head of consumer products, NFL Pete Giorgio, principal, Deloitte Consulting LLP Bobby Stephens: Hey, everybody. about how this year has been different for I’ve been with the NFL for about 10 years Welcome back to That Makes Cents, sports—what have been the ripple effects now and in a variety of different roles, Deloitte’s consumer podcast. Now, you on sports retailers, licensees, and what are worked also in our sponsorship business don’t need me to tell you that us consumers some of the major lessons learned. We’re for a while before moving into consumer have been impacted in all facets of life this going to dive into all of that. So, Joe, Pete, products a little bit ago. Prior to the NFL, I year—how we shop, how we eat, how we thank you so much for being here today. actually was a management consultant for a learn, how we work out, and how we’re Could you first tell our listeners a little bit long time with some time spent at McKinsey entertained. One type of entertainment about yourselves? and Navigant Consulting. So, happy to be that’s a mainstay for many is sports. And here and excited for the conversation. what is likely the most visible league in that Joe Ruggiero: Sure. Thanks, Bobby. And arena is the NFL. So I’m excited to have thank you to the team for having me Pete Giorgio: Excellent. Hey, Bobby, thanks joining me today, Joe Ruggiero, senior vice join today. As Bobby said, my name’s Joe again for having me too. My name’s Pete president and head of consumer products Ruggiero. I lead the consumer products Giorgio. I run the sports practice at Deloitte at the National Football League, along with practice for the National Football here in the United States, and it’s the the leader of Deloitte’s US sports practice, League. Consumer products at the NFL practice that serves professional leagues Pete Giorgio. encompasses everything that is related to like the NFL and folks like Joe, as well as the licensing of NFL trademarks. So, all of the college space, the club space, e-sports, These two really know the intersection the products that you may see and hopefully a bunch of different verticals across of sports and business. So, we’re going own with respect to headwear, apparel, everything that Deloitte sells, whether it be to explore this unique and interesting jerseys, video games, anything that might technology, accounting, tax, HR, all of those combination. Of course, we will also chat be in your home that shows your favorite things, and super excited to be here today. NFL team. That Makes Cents | Season 2: Episode 2 Bobby: Awesome. Well, it’s great to have we have some other areas that we’re really the role of marketing to sort of make you both. This is the first time we’ve tackled leaning into with respect to video gaming those connections. It just creates a really the topic of sports on our show and a lot broadly as that trend continues to accelerate interesting kind of puzzle for Joe to sort of people are probably interested in the going forward. of unravel moving forward. I’m curious, NFL and love sports but aren’t that familiar Joe. I mean, I guess, I’m assuming some with sports retail—consumer products And just one other piece to add onto that. of that resonates with you because it is specifically. I think many are interested, We work with all of our different clubs. So a complicated system that you have would love to have a job in the area. So, Joe, if you think of the rights that our team is to oversee. maybe as a starter, and as one that does this working to monetize and to develop out at the absolute highest level, could you really those partnerships are in conjunction with Joe: Oh, it completely does because we break it down for our audience? What’s it like all of the 32 clubs. So we’ll do a partnership look at it and, as Pete, you said, there’s a running a retail business for a major sports that allows a partner to use the trademarks degree that we control and a degree that league? What do you cover? You hit on it a of the Giants or the Jets or the Eagles or we don’t. And that’s why the importance of little bit in your intro, but we’d love to hear a whoever. And then often we’ll also work with partnership I couldn’t stress enough here. bit more about it. our players’ association if we want to have We work with our partners to reach those players’ names, not likenesses, associated end consumers, and those partners have Joe: Sure. So consumer products at the NFL with those products. So hopefully that to make a business for themselves, and has a couple of key portions to it. First is our provides a very top line overview. also have to be smart about how they’re licensing business, which is our relationships looking at distribution, looking at consumer with all of our licensees to produce Pete: It’s interesting, because I think the behaviors as well, really in conjunction with products with NFL trademarks on them. So experience that Joe has at the NFL and has the NFL, to push the broader ecosystem again, think of hats, jerseys, knick-knacks, had is pretty indicative of what you see in forward. And there may be times where whatever may come to mind. Secondly is our a lot of the major leagues, not just here in something that we do from driving e-comm relationship with different retail partners. So the US but actually globally too. Joe makes may not necessarily be ideal for something when we’re working with Target, Walmart, or it sound so simple and easy, but what he’s at brick-and-mortar, or something at brick- Dick’s Sports, any of those partners, which managing on a day-to-day basis, and all and-mortar may not be ideal for e-comm. are so important to how we sell today. Third these organizations are, is an astoundingly So navigating those dynamics across all piece is the operations of NFL shop, which complex web of licensees and partners and those relationships is definitely a lot of the is our premier online destination for buying distribution channels. And in a world where challenge, but it’s part of the fun that comes NFL products. So that is our DTC (direct-to- a lot of consumer products companies, they along with this too. consumer) platform. And as I’m sure we’ll don’t necessarily have the control that I’m talk, DTC is such a key piece of where the sure Joe would like to have over the day- Pete: I love it. world is going that it’s been an investment to-day and things like that. And so where that we’ve made in conjunction with our and how do you build the influence to sort Bobby: Yeah. I mean, that was a lot that we partner Fanatics, who helps to drive that of manage things, make sure the brand is just got to in that first little chunk there. I business forward. So those are three pieces. protected as you do all those things. think what we can use this discussion to do, and Pete, you mentioned a puzzle, is to kind Two others that are also key to the business And I do think the same disruptions, and of put the puzzle together maybe a piece at that our team works on is our on-field I’m sure Joe spends a ton of his time on this, a time. And we may not pick all the perfect partnerships team. So on-field for us is the disruptions that are happening across pieces, but I think the place to start, Joe, supplying and supporting all of the different the consumer products in the retail industry might be with some concepts that are more NFL clubs for all of their needs on game around, Joe mentioned direct to consumer. familiar to the listeners who are in kind of day. So making sure they’ve got the right Sports is not immune from this idea of retail and wholesale, and kind of the more jerseys, they’ve got the right products on how do you build more of a one-to-one traditional consumer industry. For instance, the sideline, their helmets, and so forth. And relationship with your customers or with how do you manage seasonality to make the working with clubs on all of those needs and your fans? The NFL particularly has a huge, NFL a 365-day a year business, given you’ve innovations in that area. And the last piece, a giant worldwide television audience that got a season and sort of an off-season. So which is a real growing piece, is our gaming is one or two or three steps removed from what challenges are presented by being business. So historically that’s meant our Joe and from the league, and those fans always on for rollouts across regular season, Madden football, which has been hopefully and those people buy a lot of this maybe big off-season events like we have a game that a lot of people have played as merchandise and things like that that Joe’s coming up soon at the NFL draft, special they were growing up with the NFL and with talking about, but we don’t really know causes like breast cancer awareness or their fandom.
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