AT&T Sponsorship Brand Profile
by Will Candy
AT&T is one of the world's largest communications brands. The telco is a sponsor of several of North America's major sporting properties, including the NCAA, NBA, and the Dallas Cowboys.
4th August 2020, 12:22
Key Information
  • Founded: 1983
  • HQ location: Dallas, Texas
  • Industry: Telecomunications
  • Annual revenue (2019): $181.2 billion
  • Main rivals: Verizon, T-Mobile, Sprint 

Background

AT&T Inc (AT&T) is a provider of telecommunications, media and technology services. The company offers wireless communications, data/broadband and internet services, digital video services, local and long-distance telephone services, telecommunications equipment, managed networking, and wholesale services. AT&T also develops, produces and distributes feature films, television, gaming and content over various physical and digital formats. It also provides advertisement, entertainment services for various household customers. The company serves individual customers and business enterprises. The company markets services under various brands including AT&T, Cricket, DIRECTV, SKY, and Unefon. It has business presence in the US, Mexico, and Latin America. AT&T is headquartered in Dallas, Texas, the US.

The company reported revenues of (US Dollars) US$181,193 million for the fiscal year ended December 2019 (FY2019), an increase of 6.1% over FY2018. In FY2019, the company’s operating margin was 15.4%, compared to an operating margin of 15.8% in FY2018. In FY2019, the company recorded a net margin of 7.7%, compared to a net margin of 11.3% in FY2018. The company reported revenues of US$42,779 million for the first quarter ended March 2020, a decrease of 8.6% over the previous quarter.

2020, the year of 5G

For wireless companies today the race to offer 5G to its customers is on, and AT&T is at the forefront of this new technology. In mid-December 2019 AT&T turned on 5G in 10 US markets, and then proceeded to double this to twenty markets later in the month. 2020 has seen a further rapid expansion in AT&T’s 5G rollout. By June 29th AT&T offered access to 5G for consumers and businesses in a total of 355 markets in the U.S. 

 AT&T map of wireless coverage

Sponsorship Overview

AT&T uses sponsorship to showcase its products and technology to consumers across the two markets in which it operates, the USA and Mexico.

To this end AT&T targets major properties across these countries biggest sports. In the US, AT&T is a long-time sponsor of US College sports through its partnership with the National College Athletic Association (NCAA), whilst the carrier also has also acted as a long-time sponsor of soccer and golf through sponsorships of Major League Soccer (MLS) and one of golfs four majors, The Masters. Meanwhile, 2019 saw AT&T become a major sponsor of basketball as it struck deals with both the National Basketball Association (NBA), and the Women’s National Basketball Association (WNBA).

In Mexico, AT&T has used shirt sponsorships of some of the countries major teams to generate brand awareness in what is a relatively new market to the wireless provider. AT&T is currently sponsor of three teams competing in Mexico’s top soccer league, Liga MX. These are Club AmericaMonterrey, and Puebla.

Venue sponsorships also form a key part of AT&T’s sports sponsorship portfolio. AT&T activates these sponsorship agreements by installing Wi-Fi hotspots and other wireless technology, namely 5G, at select venues throughout the US. In total, AT&T is the naming rights sponsor of three different sporting stadiums in the USA, all located within its home state; Texas. This includes the AT&T Stadium, the home of North American sports most valuable sports franchise, the National Football Leagues (NFL) Dallas Cowboys and the AT&T Center, home to the NBA’s San Antonio Spurs. The carrier is also founding partner and official communications provider of the $1.6 billion Mercedes-Benz stadium, which plays host to the Atlanta Falcons of NFL and Atlanta United FC of the MLS. All of these deals include rights to improve the wireless connectivity of these stadiums. Similarly to its in-stadium services, when sponsoring golf, AT&T implements its wireless technology to help fans stay up to date with on-course action.

Rapid changes in the technology and communications sector forced AT&T to reconsider a number of its sponsorship deals due to the specific rights that were included in each one. Disagreements surrounding its rights has caused the brand to end long-standing relationships with the US Olympic Committee and USA Swimming.

AT&T is increasingly using its sponsorships to target millennials. To do so, AT&T looks to create unique video content around each of its sponsorships, and has created in-ground apps for the stadiums it has sponsored. AT&T has also looked to esports to position itself for growth amongst a younger demographic. AT&T has signed a trio of esports sponsorships since 2018, partnering with the  esports tournament organiser ESL, esports organisation Cloud9, and the NBA2K League.

 Biggest Deal

 

  • Official status: Official wireless service provider
  • Partnership start: 2001
  • Estimated annual value: $25 million

 AT&T has been a sponsor of the National College Football Association (NCAA) since 2011, making the brand the longest-standing sponsor in the college association’s history. As a property, the NCAA provides AT&T opportunity to reach consumers across the entirety of the US, a significant benefit to a brand that operates in all corners of the country. College sport in America is hugely popular, attracting both high attendances at matches across a variety of sports, and impressive viewing figures on TV.

Connectivity is at the core of AT&T’s services and thus activations surrounding the property are focused on showcasing the brands capabilities in this department. For example, as a sponsor of last year’s Final Four, the culmination of the college basketball season, AT&T upgraded its portion of the host arenas (U.S. Bank Stadium in  Minneapolis) Distributed Antenna System (DAS) to provide more LTE capacity to customers and therefore the best possible wireless experience. Wireless capacity was also boosted for the women’s NCAA Final Four in Tampa. Connectivity problems in busy places, e.g. sports stadium are common place and thus such activations help AT&T differentiate from rival brands and ultimately help drive consumers to choose them as their chosen network provider. 

AT&T uses sponsorship to promote expanding lines of products

As detailed in the companies background, AT&T has made a number of acquisitions in recent years, resulting in an expansion in its line of products. Sponsorship of large sports properties such as the NCAA provides the telecommunications brand with an effective median to advertise these new products to its consumer base. AT&T therefore during the Final Four put on activations that tied into its marketing campaign supporting HBO’s final season of Game of Thrones (HBO is a subsidiary of Warner Media Entertainment whom were acquired by AT&T in 2018). These activation included a Game of Thrones-themed shot contest inside the AT&T Fan Zone with scores tracked by an online leader board whilst inside the stadium, and the use of AR technology to bring game attendees into the Game of Thrones realm on the stadium’s video screen above canter court.

Notable Deals

 

AT&T became the next official wireless sponsor of the National Basketball League in February 2019, taking the title from long-time rival Verizon. The multi-year partnership with the NBA gives the carrier a platform to connect with a younger, more diverse audience across the league, as do the other assets included in the deal – the Women’s National Basketball Association (WNBA), NBA G League, NBA 2K League (esports competition) and USA Basketball.

Today, video assets are integral to sponsorships, thus for AT&T, having subsidiary company Turner acting a digital partner of the the NBA is a major bonus for the carrier. AT&T will no doubt seek to capitalise on the partnership as it looks to release content fans today crave. Meanwhile, DirecTV, also owned by AT&T, currently broadcasts some 4K games and the NBA, in partnership with Intel, has broadcasted games in virtual reality (VR) via Turner Sports. Such instances go a long way in projecting AT&T’s technological innovations to a sizeable viewing audience.

On the topic of technological innovations, 5G once more will once again form a central part to its sponsorship of the league, as it looks to leverage the properties reach to market its 5G products. This was no more evident than at the beginning of the 2019-20 NBA season when AT&T offered NBA fans a number of new experiences with the launch of 5G in multiple arenas. One of these arenas is the United Center, where AT&T showcased its 5G capabilities at the NBA All Star 2020.

Despite taking the title of wireless sponsor away from rival brand Verizon, Verizon still remains involved with the property. AT&T’S rival in 2018 inked a multi-year deal with the property, in an agreement that focus’ on content with digital video shows such as "The Bounce," a multi-part effort with the NBA, Turner and Yahoo Sports. Verizon also has rights to sell subscriptions service NBA League Pass. 

 

 

In July 2013, AT&T acquired the naming rights to home of the Dallas Cowboys, of American football's NFL. The 100,000-capacity venue, which staged the 2011 Super Bowl, had been called Cowboys Stadium since it opened in 2009. Such venue naming rights deals are appetising to telecommunications brands such as AT&T. Through sponsorship of the venue AT&T is able to install its latest innovations and subsequently showcase them to consumers. Indeed, in February 2019, AT&T announced it had made the stadium America’s first arena with 5G and beginning with the 2019-20 NFL regular season, AT&T has used the technology to put fans at the stadium at the centre of the action. Activations include:

  • Hype Up Chants: From when entering certain areas of the stadium you can see larger than life players, including 36-foot tall Dak Prescott, towering over the arena. This can only be viewed through the camera of the provided Galaxy S10 5G.
  • Hall of Heroes: Fans can capture their own touchdown dance over 3-D video on a supplied Samsung Galaxy S10 5G that looks as if Cowboys players are dancing right next to you.
  • Pose with the Pros: Throughout the stadium’s east platform fans can digitally jump in for a video with virtual Cowboys players like and share with all your friends on social.
  • Live Game Data & Time Tackle: At club level of the stadium, fans can track the team’s performance and view live player stats using localized AR content on provided Galaxy S10 5Gs, just like experiencing a live TV broadcast at home. Fans can also dodge virtual defensive robots on the field as they make way to the end zone in a game built specifically for the activation.

Such activations as above are key to showcasing the carriers 5G product, and are all enacted with the end goal of driving customers to purchase their 5G products. AT&T is reported to pay $17 million per year for the multi-year naming rights agreement.

 Timeline 

 

Strategy Breakdown

Sponsorship Spend by Sport (US$)

*All values are estimated

AT&T’s sports sponsorship focus is understandably contained to sports most popular in its operating markets, i.e. the US and Mexico. On this note, Sportcal estimates the carrier to spend the most on US College sport, one of the countries most followed activities, with its already detailed sponsorship of umbrella organisation the NCAA and title sponsorship of the athletics track owned by Texas Tech University estimated to cost the brand $28.5 million annually.

For AT&T, soccer has the bi-benefit of being popular in both the US and Mexico and through brokering a deal with Soccer United Marketing (SUM), the commercial arm of MLS, the carrier has targeted properties within the sport on both sides of the boarder. A renewal signed with SUM in July 2017 saw AT&T renew its sponsorship of several of North America’s pre-eminent soccer properties, including the MLS, US Soccer and the Mexican soccer association (FMF). The multi-year deal also includes the Mexican national team’s annual tour of the US, which AT&T has sponsored since 2005. In all, the agreement is reported to be worth in the region of $14 million annually. As mentioned, the telecoms giant has also struck as number of shirt sponsorship deals with some of Mexico’s biggest clubs as it looks to break into the market. Currently, its shirt sponsorships of Liga MX sides Club America, Monterrey, and Puebla is estimated by Sportcal to cost the brand $10 million per year.

AT&T’s entry into basketball, another one of the US’s most popular sports, as a major sponsor has been fairly recent, with the brand signing major deals with both the NBA and the WNBA in 2019, both replacing rival Verizon’s position as sponsor in the process. Whilst the deal with the NBA has already been detailed, AT&T’s deal with the WNBA, signed in April 2019, saw AT&T become the first non-apparel partner to have its logo featured on the front of the jerseys of all 12 WNBA teams. Sportcal estimates the carrier’s deal with the NBA to cost approximately $15 million per year, whilst the deal with the WNBA is estimated to cost $2.5 million annually. AT&T’s involvement in the sport is completed by its title sponsorship of the home of NBA franchise San Antonio Spurs (reported annual fee of $2.05 million), and sponsorships of fellow franchises the Houston Rockets and the Chicago Bulls, estimated to be worth $1 million each.

AT&T’s spend on American football spend stems from its sponsorship of two of America’s largest sports venues, the 100,000 capacity AT&T stadium (Dallas Cowboys) and the 80,000 capacity Mercedes-Benz Arena (Atlanta Falcons and Atlanta United). AT&T is reported to spend $17 million per year to lend its name to the home of the Dallas Cowboys. Meanwhile its status as founding partner and official communications provider of the Mercedes-Benz Stadium is valued at $3 million per year by Sportcal.

Golf is frequently used by brands as a platform to reach a more affluent consumer base, and like with many of its other targeted sports, AT&T is sponsor of one of the sports major properties, The Masters. AT&T acts as a global partner of one of golf’s four majors in an agreement that is estimated to be worth $6 million. AT&T is also a sponsor of American golf powerhouse Jordan Spieth in an agreement that sees the player make personal appearances for AT&T and participate in social media, advertising and other promotions. In the women’s game, AT&T partnered with Maria Fassi in a multi-year deal in January 2020. Sportcal estimates the deal to be worth $2 million a year.

Continuing with the theme of popular US sports, AT&T is also a sponsor of Ice Hockey in the country. Within the sport, Sportcal has confirmed deals from AT&T with the Chicago Blackhawks, the Nashville Predators and Dallas Stars.

AT&T does not at the time of writing have a baseball partnership on its portfolio after the brand chose not to renew its deal with the New York Yankees for the 2020 Major League Baseball Season  The carrier walked away from its Yankees sponsorship deal after rival T-Mobile expanded its relationship as the official wireless brand of Major League Baseball in March 2019.

AT&T embraces esports

Esports is being increasingly used as a median by brands to position themselves for growth amongst young, digitally minded customers, and for AT&T it is no different. Since the carrier first dipped its toes into esports in June 2018, when partnering with esports tournament operator ESL, the carrier has signed additional sponsorships with leading organisation Cloud9 and the NBA 2K League. Partnering with such leagues and organisations AT&T is enabled with opportunity to reach its target market and indeed, at the beginning of 2019, the brand claimed it would be able to reach more than 22 million people each month across social media and digital platforms used by esports organisations it sponsors.

Top 10 Deals ($US)

 *All values are estimated

Eight of AT&T’s ten biggest deals financially are with major American sports properties. Deals with such properties which provides brands with reach to all corners of the country inherently command large fees and Sportcal estimates the carriers deal with the NCAA to be its largest financial commitment, coming in at an estimated $25 million per year. Meanwhile, AT&T’s previously detailed sponsorships of the home of the Dallas Cowboys (AT&T stadium), the NBA, MLS and The Masters golf championship come in at $17 million, $15 million, $14 million and $6 million respectively.

Two of AT&T’s shirt sponsorships of Mexican soccer teams make the top 10. The agreement with America is estimated by Sportcal to be worth $5 million annually. America is widely regarded to be one of Mexico’s biggest soccer teams. The carriers agreement with fellow Liga MX club Monterrey is estimated to be worth $3 million a year. Monterrey played Liverpool in this years Club World Cup Semi-final.

Partnership Length

 

AT&T has established long-running relationships with several of the US’ top sporting properties. The longest of these is its title sponsorship of the Pebble Beach National Pro-AM. The carrier has given its name to the event, which is held in February at Pebble Beach in California, since 1986, making it the second-longest sponsorship on the PGA Tour. Meanwhile AT&T has now partnered with NCAA for 19 years, The Masters Golf for 15 years and the MLS for 11 years. AT&T in its sponsorships aim to be seen by consumers as part of the properties ecosystem, and in partnering with properties for such lengths of time shown above, goes along way in allowing this to happen. On the whole the carrier tends not to announce the exact length of its contracts, but one can usually expect any new deals struck by the brand to be for the long-run.

As has been detailed, venue title sponsorships form a central part of AT&T’s sponsorship strategy. Within the sports sponsorship industry venue title sponsorships are typically the longest deals struck as brands have the chance to become synonymous with the property. AT&T’s venue title sponsorships are no different as the brand has put its name the Jones AT&T Stadium and the AT&T stadium for 14 years and seven years respectively.

Covid-19 Impact

AT&T posts drop in underlying earnings as TV market hit by Covid-19 restrictions 

AT&T reported first-quarter revenues down 4.6 percent to $42.8 billion, as its WarnerMedia division suffered from the Covid-19 outbreak's impact on the film and TV industry and the operator continued to lose pay-TV subscribers. Ongoing cost-reduction efforts helped limit the impact on profits, and AT&T said it was on track with its strategic investments, while conserving cash for the upcoming economic slowdown. Given the economic uncertainty, the group withdrew its guidance 2020.

The coronavirus impact was strongest at WarnerMedia, which lost around $1 billion in revenue year-on-year and over $500 million in adjusted EBITDA. The unit suffered from the suspension of key events such as the NCAA basketball tournament and new cinema releases, a slowdown in advertising due to the reduced economic activity and a halt to most production activities.

The telecom business posted revenues down 2.6 percent to $34.2 billion, while adjusted EBITDA rose 2.1 percent to $12.8 billion. While AT&T Wireless grew service revenues 2.5 percent, revenues continued lower at the Entertainment group, as the company lost another 1.035 million pay-TV subscribers in the quarter. Mobile subscriber growth slowed to 27,000 postpaid net adds (+163,000 with phones), and the broadband base fell by another 73,000 customers in the three months. 

AT&T to remain active in the market as it seeks to promote new product

Despite a drop in underlying earnings AT&T remains in a financially sound position, a statement underlined by its ample liquidity. As such, we do not expect Covid-19 to prompt any sort of retraction in AT&T’s sports sponsorship portfolio. In terms of signing new agreements, the telco will no doubt remain active in the market as it looks to continue promoting its products, especially those new. An agreement signed with LeBron James in March 2020 demonstrates this. The basketball star became a brand ambassador for the telecommunications giant in a multi-year deal. As part of the agreement, James is fronting a national ad campaign for the new AT&T TV service.