Globe and Mail, Brian Milner, 3 October 2007
Bank of Nova Scotia is hitching its marketing wagon to the National Hockey League in a costly deal designed to raise its profile and boost its weak share of the Canadian consumer banking market.
The five-year pact that makes Scotiabank the official bank in Canada of both the NHL and its players' association, the NHLPA, will cost an estimated $50-million. The price includes $5-million annually for rights fees and about the same amount each year for advertising, incentives and other marketing costs associated with the deal, say people familiar with the agreement.
Neither the bank nor the NHL would reveal the terms, but it's the richest sponsorship deal signed by the league since before the player lockout that wiped out the 2004-05 season. The league would love to lure similar dollars in the U.S. market, but Canada remains its best source of such revenue.
The high price reflects heavy competition among the major banks for marketing supremacy in the Canadian sports landscape, sports industry watchers say.
Scotiabank is a more recent entrant to the battlefield, as chief executive officer and acknowledged sports nut Rick Waugh has launched a major push into big-time sports and entertainment sponsorships to gain ground on his stronger domestic rivals.
The key, he said, is boosting brand awareness. “It's going to be good for us, it's going to be good for our customers and the community, and that is going to get us more customers, hopefully. And that's market share, and that's good for the shareholders,” Mr. Waugh said Wednesday after a news conference hosted by CBC broadcaster Ron MacLean.
The bank is also sponsoring a new CBC pregame show hosted by Mr. MacLean that will run Saturdays before Hockey Night in Canada.
Scotiabank's marketing data indicated the bank is good at retaining customers, but “we were not high on the radar screen” when it comes to attracting new consumer business, Mr. Waugh said. “We're not the No. 1 or No. 2 bank [of choice]. We're third, fourth or fifth; That's our opportunity.”
The NHL gives the bank a national platform for its brand, which it does not have with its existing hockey sponsorships with the Edmonton Oilers and Calgary Flames. The bank has also held naming rights to the Ottawa Senators' arena, now called Scotiabank Place, since 2006, in a 15-year deal that cost $20-million.
Scotiabank's deal with the NHL sets up a pitched battle with the country's largest financial institution, Royal Bank of Canada, which is a major sponsor of Hockey Canada and the Olympics. RBC has poured money into grassroots community hockey programs as part of its sponsorship of the sport. Scotiabank is eager to get on to the same turf.
“It will definitely give them [Scotiabank] a point of difference in the marketplace,” said Keith McIntyre, president of Mississauga-based K. Mac & Associates Marketing Inc. “It creates a competitive playing field.”
The bank has been exploring a connection with the NHL for the past couple of years, but the league didn't begin looking for a banking sponsor until earlier this year. Scotiabank and the NHL began negotiations in the spring.
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Bank of Nova Scotia is hitching its marketing wagon to the National Hockey League in a costly deal designed to raise its profile and boost its weak share of the Canadian consumer banking market.
The five-year pact that makes Scotiabank the official bank in Canada of both the NHL and its players' association, the NHLPA, will cost an estimated $50-million. The price includes $5-million annually for rights fees and about the same amount each year for advertising, incentives and other marketing costs associated with the deal, say people familiar with the agreement.
Neither the bank nor the NHL would reveal the terms, but it's the richest sponsorship deal signed by the league since before the player lockout that wiped out the 2004-05 season. The league would love to lure similar dollars in the U.S. market, but Canada remains its best source of such revenue.
The high price reflects heavy competition among the major banks for marketing supremacy in the Canadian sports landscape, sports industry watchers say.
Scotiabank is a more recent entrant to the battlefield, as chief executive officer and acknowledged sports nut Rick Waugh has launched a major push into big-time sports and entertainment sponsorships to gain ground on his stronger domestic rivals.
The key, he said, is boosting brand awareness. “It's going to be good for us, it's going to be good for our customers and the community, and that is going to get us more customers, hopefully. And that's market share, and that's good for the shareholders,” Mr. Waugh said Wednesday after a news conference hosted by CBC broadcaster Ron MacLean.
The bank is also sponsoring a new CBC pregame show hosted by Mr. MacLean that will run Saturdays before Hockey Night in Canada.
Scotiabank's marketing data indicated the bank is good at retaining customers, but “we were not high on the radar screen” when it comes to attracting new consumer business, Mr. Waugh said. “We're not the No. 1 or No. 2 bank [of choice]. We're third, fourth or fifth; That's our opportunity.”
The NHL gives the bank a national platform for its brand, which it does not have with its existing hockey sponsorships with the Edmonton Oilers and Calgary Flames. The bank has also held naming rights to the Ottawa Senators' arena, now called Scotiabank Place, since 2006, in a 15-year deal that cost $20-million.
Scotiabank's deal with the NHL sets up a pitched battle with the country's largest financial institution, Royal Bank of Canada, which is a major sponsor of Hockey Canada and the Olympics. RBC has poured money into grassroots community hockey programs as part of its sponsorship of the sport. Scotiabank is eager to get on to the same turf.
“It will definitely give them [Scotiabank] a point of difference in the marketplace,” said Keith McIntyre, president of Mississauga-based K. Mac & Associates Marketing Inc. “It creates a competitive playing field.”
The bank has been exploring a connection with the NHL for the past couple of years, but the league didn't begin looking for a banking sponsor until earlier this year. Scotiabank and the NHL began negotiations in the spring.
