Longhorn Energy

Are consumers ready for Texas Longhorns Energy?
Collegiate sports brands plug into unique marketing effort By TERRY LEFTON Staff writer Published July 26, 2010 : Page 01 SportsBusiness Journal July, 2010.

For years, marketers have been employing the power of sports affinities to sell goods and services. Now there is a new and unique demonstration of sports marketing's clout — it's being used to sell electric power.

The University of Texas has signed a six-year deal with Dallas-based Branded Retail Energy, which will likely be the first of a number of deals with the company that will see some of the country's most powerful collegiate sports brands sell consumers electricity and natural gas in deregulated markets. Consequently, Texas Longhorns Energy will be available to consumers in mid-August.

The electricity will be supplied by Champion Energy Services and is being touted as 100 percent renewable energy to alumni and fans in deregulated regions of Texas. Every new account will generate funds for the University of Texas and consumers will receive Longhorns merchandise, memorabilia, access to events, ticket discounts and other benefits as incentives, including likely co-promotions with other UT sponsors.

UT has around 280,000 alumni in its home state, and 450,000 across the country. Its licensed merchandise produces the most royalties of any of Collegiate Licensing Co.'s college programs, and its Bank of America affinity credit card and associated banking program is one of the country's biggest.

While the passion is there, this is a test to see how deep it will run.

Wrapping the program around collegiate affinities and a green message of supporting sustainable energy efforts is what will make it work, said Larry Weil, a longtime sponsorship consultant, who joined Branded Retail Energy as CMO late last year.

"This is not a gimmick. This is renewable energy at a competitive price,"
Weil said. "But when you combine it with the depth of passion people have for their university, it should be a powerful marketing platform, because you can give something to your school and do something green at the same time."

UT was attracted by the promise of reducing its carbon footprint. "We don't have an energy partner, but what really appealed to us was the opportunity to fund renewable energy at our school," said Chris Plonsky, UT's senior associate athletic director. IMG College helped negotiate the deal for UT.
As a hybrid licensing/sponsorship arrangement, the deal took almost a year to complete.

For fans, changing energy providers is akin to changing telecom carriers.
The program will be promoted via in-stadium signage, program ads, as well as Web, TV and radio advertising.

"There were a lot of moving parts from a legal perspective," said longtime sports and entertainment attorney Matthew Pace of Herrick, Feinstein, who handled contracts for Branded Retail Energy on the Texas deal. "Power, just like credit cards, are tough to distinguish in the marketplace and I can see college and pro sports opportunities in the years to come."

Electric power has been deregulated in much of Texas, though curiously not in UT's hometown of Austin, since 2002. Fierce competition in major metropolitan markets (there are 50 meaningful competitors) is evident by the fact that an NFL stadium (Houston's Reliant Stadium) and an MLS jersey (Houston Dynamo/Amigo Energy) are tied to energy providers.

Branded Energy CEO Jason Helms, who conceived the idea, had seen the deregulated Texas energy market change from one that was entirely price-based, to one filled with claims of superior customer service, all supported by heavy media spends to the point where electricity providers became some of the larger prime-time advertisers in places like Dallas and Houston.

"What was needed was a stickier message," Helms said. "Everyone loves their college experience or at least has a favorite college, and here UT is at the top of the heap, so that's where we started."

Where the program goes from here is an intriguing question. There are 14 states with some form of power deregulation and some of the larger ones, like Illinois, Pennsylvania and Ohio, all have large state universities with huge fan bases.

Energy companies have been spending on sports sponsorships for some time.
Could this hybrid approach be the creation of a separate category? Anyone ready for Packers Power or Consolidated Yankees?

"Energy is a commodity just like credit cards, so it should work," said Rob DiGisi, a former NBA and Bank One credit card marketer, with expertise in affinity marketing, and now a consultant. "But just like credit cards, there should be rewards attached, because the appeal of a vanity plate can be short-lived. There also should be some kind of badge to demonstrate your support to your school. With a credit card, you had something to carry all the time that demonstrated that affinity tie."