Enhancing a sports sponsorship strategy that has revolved around the Olympic Games for the past nine years, Visa U.S.A. has signed a five-year agreement that designates it the "official payment card" of the National Football League.
Visa will pay $40 million, an industy source said. The deal gives it and its members rights to tie marketing and promotional programs to NFL events and players.
In a related announcement, MBNA America Bank said it won the right to issue Visa cards on behalf of each of the NFL's 30 teams over the same five-year period. The MBNA Corp. unit replaces Citibank, which had been issuing NFL affinity cards since 1987.
An MBNA spokesman said it will offer cards in time for the 1995 fall season at no annual fee and a variable prime-plus-9.9% interest rate, with reward enhancements currently under consideration.
A Citibank spokeswoman said it had issued 100,000 cards, which it expects to retain in part by dropping the $25 annual fee.
Visa's league sponsorship is designed to build brand awareness with a domestic impact comparable to that of its global Olympic tie-in, said Visa U.S.A. president Carl Pascarella.
"Except for the Olympics, you don't get much bigger than the NFL, said Jim Andrews, vice president of IEG Sponsorship Report, a Chicago-based newsletter. He said only one NFL sponsorship is bigger than Visa's: a four- year, $50 million arrangement with Coca-Cola.
Mr. Pascarella said the NFL sponsorship will have its greatest impact during the fourth and first quarters each year - spanning the busiest time for bank card spending and the publicity buildup to the Super Bowl in late January.
"We believe (the NFL) compares very favorably with our investment in the Olympics," he said. "One of the reasons is we're focused on the American market. This is, I believe, much more value in return for the investment, simply because it can be focused on our largest market in the world and (a sport) that has a tremendous following."
As the offical payment card, Visa will have exclusive rights to use the logos, names, and colors of the NFL and its member clubs. It will not be able to claim, as it does with the Olympics and U.S. Open Tennis, that only Visa cards are accepted at event venues.
Visa's payment-card rights extend to league-owned events like the NFL Experience, NFL Quarterback Challenge, NFL Run to Daylight, and NFL Air-it- Out.
Through its members, Visa can develop exclusive marketing and merchandising campaigns around NFL events, Mr. Pascarella pointed out. "The sponsorship really is just the key to the door."
Other marketing activities will include:
* Merchant programs using point-of-sale signs with NFL themes to help stimulate sales and increase Visa volume;
* Sweepstakes, contests, game card promotions, and giveaways;
* Special offers for cardholders under the Visa Rewards program;
* Collectible stored value cards for the Super Bowl and Pro Bowl games;
* Local and national Visa advertising highlighting the NFL.
"Visa's broad popularity and broad audience make it a good match with the NFL, which also enjoys a broad and devoted fan base," said Sara Levinson, president of NFL Properties Inc., the marketing arm of the league.
In their sponsorship announcements, Visa and MBNA cited the popularity of professional football. Each week during the season, nearly 80 million people watch football on television and almost one million attend games. Some 750 million in 140 countries watched the last Super Bowl.
"The NFL gives you a national event (and) 30 local tie-ins as well," Mr. Andrews said. "On any given Sunday, there's stuff going on in 15 different markets, and that can make a big statement."
American Express Co. and MasterCard International reportedly bid against Visa for the NFL rights. Visa is the first to win this category, and its contract extends to March 31, 2000.
The sponsorship fills a gap for Visa between the 1996 summer Olympics in Atlanta and the Winter Games in Japan in 1998.
"After 1996, there's going to be a natural fall-off," Mr. Pascarella said. "It was very important for us to get some kind of follow-on in the sports marketing area. Our feeling is that nothing comes close to an NFL sponsorship at this time."
He said Visa will be looking for other sponsorships. "Everything we do has to fall into the parameters that say this is going to be beneficial to banks' bottom lines."