Anywhere there’s an athletic contest and a business looking for exposure,
agents and insurers have an opportunity
By Bob Bloss
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New York Yankees outfielder Hideki Matsui (center) with his junior high school coach and mentor, Michihiro Takakuwa (right), and Howard Smith, American International Group, Inc. (AIG) Vice Chairman (left), at home plate during the Yankees vs. Mariners game on May 15. AIG sponsored “Matsui Notebook Day,” giving away 18,000 promotional notebooks and pledging one million yen ($10,000) to both the Bronx-based Parkchester Little League and the Japan Little League Baseball Association. |
Try as they might, baseball’s foremost sluggers could not put a dent on a distant bull’s eye.
Eight prominent major leaguers stepped up to the plate in the annual Home Run Derby on the eve of mid-July’s All-Star Game at Houston’s Minute Maid Park. All of them delivered wallops of well more than 400 feet, but no one hit a small target placed and sponsored by MasterCard. Had the sign been hit, MasterCard was obligated to present $1 million to a fortunate ticket holder whose seat number had been chosen at random. Barry Bonds came closest, missing the goal by just several inches. The offer remained in effect for the following night—the All-Star Game itself—if any batter hit the sign. None did.
Even though the sign was in long-distance range of these popular big league power hitters, chances were slim that MasterCard and its insurance underwriter would have been called on to remit the cash prize. However, another firm’s offer of $250,000 was a certainty to be collected. Century 21, the Derby’s title sponsor, guaranteed a quarter-million dollars toward a residential property for the lucky one of eight persons who were finalists in its national sweepstakes that attracted more than 100,000 entries. Each of the eight, who were on the field during the festivities, represented one of the players participating in the long ball contest. Baltimore shortstop Miguel Tejada won the Home Run Derby; his designated “teammate,” Paula Bowen of Renton, Washington, won the Century 21 $250,000 award.
Both of those well-publicized All-Star contests are examples of promotional events connected to athletic competition. By the very nature of these entertaining ventures, the insurance industry’s prize indemnifiers are major players. Especially in the second of the following broad categories into which such events generally fall: (1) spectator participation, where a winner is guaranteed (such as the award from Century 21 when Tejada won the home run derby; or perhaps a lucky-number scorecard holder chosen at random), and (2) an event tied directly to an on-field accomplishment (i.e., batters’ attempts to reach the million-dollar MasterCard sign).
Insurance’s relationship with sports, of course, is nothing new. From local agency sponsorship of youth teams and participation in charity events such as cancer crusade walk-a-thons, to corporate identity at nationally spotlighted golf tournaments and football bowl games, the insurance industry has long been an active partner. This year AIG, in conjunction with the New York Yankees, designated May 15 as Hideki Matsui Notebook Day. Yankee outfielder Matsui is a native of Japan. That day’s visiting team, Seattle, features Japanese-born Ichiro Suzuki, a perennial All-Star. The first 18,000 youngsters at Yankee Stadium received spiral notebooks containing a photo of Matsui and a list of popular Japanese baseball terms. AIG, which has a leading insurance presence in Japan, also donated several thousand dollars (and yen) to a Bronx-based Little League and the Japanese Little League Baseball Association. Additionally—and here’s another example of a promotion tied to an on-field outcome—$10,000 and equivalent yen were designated to each organization for every home run Matsui might register during the May 15 game. He hit one.
Prize indemnification insurance is issued somewhere virtually every day during the baseball season, usually in several of the 200-plus cities and towns where minor league teams play. While major league clubs conduct “special nights” occasionally, their minor league farm clubs book colorful drawing-card activities nearly every night.
Dave Chase, director of the Museum of Minor League Baseball in Memphis, remembers when a Charlotte, North Carolina, jeweler sponsored an outfield wall display ad featuring an oversized replica of a diamond ring (an obvious baseball tie-in). If a batter blasted a home run through the ring, a lucky seat holder would win a valuable prize. The ring in the display was roughly the shape of the Charlotte team’s “O’s” logo.
Lou Valentic, senior vice president/executive accounts at K&K Insurance Group, Inc., cites a similar promotion in Ft. Wayne, Indiana. A window glass company placed an actual pane of glass within its advertising signage. If a batted ball shattered that glass a lucky fan won a major prize. Promoters agree that in-park excitement and beneficial publicity are assured if the winner is in attendance at the special event. Sometimes, however, winners need not be present to claim prizes. To build traffic, retailers often require contest entrants only to register on site at their stores.
Occasionally the athlete himself/herself is an award recipient. The aforementioned examples bring to mind a sign on the right field fence at Brooklyn’s old Ebbets Field where local clothier Abe Stark’s paid ad was inscribed with “Hit Sign, Win Suit.” Wily Abe earned widespread notoriety for his business establishment, but probably never bought an insurance policy to cover the risk, nor was he regularly required to deliver new duds to a batter. Because the sign was only about three feet off the ground, balls hit toward it were usually intercepted by alert outfielders!
Golf hole-in-one contests have long been a popular promotion. Often a car, a boat or some other item of substantial value is awarded to the person whose tee-shot scores an ace. Of course, odds against such achievements are great, whether it’s baseball or golf feats, catching a tagged fish, or throwing a football through a distant target. According to the 2004 edition of The Insurance Marketplace—the annual excess, surplus, and specialty lines directory published by The Rough Notes Company—nearly 50 listed companies write prize indemnification coverage. Some of them have “Hole in One” in their names, but their business is not limited to golf.
Sam Schachter, special events/marketing director at National Hole-In-One Association in Dallas, has been involved in a variety of baseball promotions. “Coverage is based on the value of the prize,” Schachter explains. “Usually it’s somewhere between 3% and 12%. But much depends on the difficulty of the endeavor, and, where records are available, the odds against achievement. At the beginning of a recent baseball season a car dealer noticed the odds of his local team’s winning the World Series were 100-to-one. He considered offering cars, free, if customers purchased them during a particular springtime month—and if the team won the following October’s World Series. However, he decided to forgo the promotion and he soon forgot about it. But by late August the team surprisingly remained in contention for post-season action. So he came back to us to re-consider the project. By then, though, our original premium quote of about 5% had expired. Now it was significantly higher. But he accepted it anyway. The dealership sold over a million dollars worth of cars in 36 hours. And, you guessed it; the local team fell short, failing to advance to the Series. The dealer’s insurance premium cost was multiplied many times over in sales.
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“If a home run lands in the pool, a lucky ticket holder wins a Nissan automobile. Luis Gonzalez ... hit a long drive that headed directly toward the pool. But just before splashdown, the life guard out there caught the ball ... But without any hassle we agreed to buy the car. It was the right thing to do.” —Bob Hamman, CEO |
“Recently a television network was our client for a 40-game baseball ‘cycle’ contest (a player’s hitting a single, double, triple, and home run in the same game). With the score about 17-to-1 late in one game, Phil Nevin of the San Diego Padres had already singled, doubled and homered. He needed just a triple—the hardest of the four to accomplish. He smacked a drive into the outfield gap, but with the outcome of the 17-1 game pretty well decided, he chose to stop at second rather than sprint for a possible triple. He had no idea about the contest. But, of course, some fan who stood to win a car, must have gone berserk.”
Chuck Domino, award-winning general manager of the Eastern League’s Reading (Pennsylvania) Phillies, experienced a fright a few seasons ago when a grand slam contest was in effect. Domino explains: “Greg Edge, our shortstop, came to the plate with the bases loaded. If he homered, a lucky fan—in the seat whose number we’d drawn and already announced—would win a major prize. Edge was a slap hitter, without much power. But he tagged a pitch pretty well, and sent it between the outfielders. As the throw eventually came back toward the infield the three runners had scored and Edge was already nearing third. I was the happiest man in town when I saw our coach hold Edge at third base. It’s not that I was reluctant to award the prize. Just the opposite. But our insurance contract noted that a grand slam home run ‘must’ leave the park. Go over the fence or into the stands. It could not be an inside-the-parker. Our coach had no idea about an insurance contract; he was completely innocent. But what if I had to explain that small print to the fan in the winner’s seat?”
When certain technicalities come into question, Todd Overton and CEO Bob Hamman of SCA Promotions, Inc./SCA Insurance Specialists, Inc., in Dallas stress the importance of good public relations and customer relations. They related an incident that occurred at Phoenix’s Bank One Ballpark, which has a supervised swimming pool just beyond the right field fence.
“If a home run lands in the pool, a lucky ticket holder wins a Nissan automobile. Luis Gonzalez, of the home team Diamondbacks, hit a long drive that headed directly toward the pool. But just before splash-down the life guard out there caught the ball—maybe to prevent its hitting a swimmer. Anyway, technically the ball did not land in the water, as the contract prescribed. But without any hassle we agreed to buy the car. It was the right thing to do.”
SCA was involved with a nationally-prominent prize promotion back in 1989. If Hall of Fame pitcher Nolan Ryan, then with the Texas Rangers, pitched a no-hitter that season, Little League Baseball would have received $1.25 million. He came close several times but couldn’t manage a no-hitter that year. However, the contract (with Best Western and American Express Travel) called for Little League to receive $300 for each Ryan strikeout in ’89. He posted 301 of them.
Most agents and brokers seldom have a chance to land major national prize promotions such as the All-Star Game or the Nolan Ryan/Little League program. Nevertheless, numerous sales opportunities do exist within their communities. Hole-In-One contests are always popular, as are such events as basketball free throw contests at halftime of high school games, bowling-for-dollars or football-related contests. Other opportunities involve special events that are cancelled or postponed by inclement weather.
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Hideki Matsui watches his home run leave the park during the May 15th Yankees vs. Mariners game. |
Food and beverage marketers, entertainment center retailers, and sports bar/restaurant chains are popular targets for prize indemnities related to on-field football outcomes. Policies are written against the odds of a second-half kickoff returned for a touchdown. Or for back-to-back touchdowns. Perhaps for a field goal of a specified extraordinary length. Or someone who buys a state-of-the-art HDTV monitor by, say, the end of September could fill out an entry form with his or her choice of the eventual Super Bowl winner. And if the buyer’s team wins, the purchase price of the TV could be refunded after the Super Bowl. The revenue generated from HDTVs purchased by non-winning entrants will likely far exceed the relatively small cost of the retailer’s risk insurance premium.
Popular promotions that award prizes for feats of athletic skill or for predicting outcomes are nothing new. But now, often with national television exposure, they’re magnified many times over in terms of payouts and fan participation. Today’s promotional events, many of them corporately sponsored, usually feature annuities when the monetary prize is substantial. Often a charity is designated as a co-beneficiary. Now, unlike haberdasher Stark’s modest financial outlays—if, in fact, any batter actually did hit that small sign in Brooklyn—insurance plays a significant role as an important cost element of sponsorship.
Prize indemnity policies are well worth the premium cost to the insured when a payout is required. And they’re good selling opportunities for agents and brokers whose clients and prospects organize promotional events that build family atmospheres in local arenas and attract customers to their business establishments. *
The author
Bob Bloss is a freelance writer based in Plymouth Meeting, Pennsylvania. He is the author of two books on baseball.