If you’re a sports fan, it’s likely you’ve seen Microsoft’s branding at some point in the past few years.
Highlighted by its huge sponsorship deals with the NFL and Real Madrid, the Redmond-based tech giant is putting time, money, and energy behind a handful of recently-inked sports partnerships to help boost its brand.
GeekWire caught up with Microsoft Chief of Marketing Chris Capossela at the company’s inaugural Envision conference in New Orleans earlier this month and asked him about the move into sports. From the $400 million NFL deal that brought the Surface tablet to the sidelines to how Real Madrid is using Microsoft’s technology for its business operations and fan engagement strategy, it’s clear that the company sees something unique in the sports industry.
“When we look at where we want our products to show up, one of the questions you ask is, what are people’s passion points?” explained Capossela, who joined Microsoft in 1991. “A few of them really spike to be much, much bigger than all the rest. Sports is really high on the list.”
The passion that millions of Americans have for football is undeniable and it’s likely part of why Microsoft paid $400 million for the 5-year sponsorship deal with the NFL in 2013. NFL fans have probably seen Microsoft’s name at some point in the past three years and in particular on the sidelines, where players and coaches now use custom-made Surface Pro 3 tablets to review screenshots of past plays — an improvement over the old method of using black-and-white paper printouts.
While not all players and coaches have embraced the new technology, it’s clearly making a positive impact on the game.
“We’ve had people say that this is totally revolutionizing the way they play on the sidelines,” Capossela said. “That is really what we’re looking for — can our technology help transform something? If it can be married up with a sport people have passion for, then a technology partnership makes a decent amount of sense.”
But the NFL deal hasn’t been all gravy for Microsoft. Several commentators mistakenly referred to the Surface tablets as “iPad-like tools,” most recently during last season’s opener when Al Michaels called the device an “iPad” on national television.
“Imagine how happy that makes everybody inside the halls of Microsoft,” Caposella noted.
Then, during the AFC Championship in January, New England became “frustrated” after its Surface tablets stopped working for a brief period. Sideline reporters said the tablets were malfunctioning — not the greatest branding for Microsoft — though the NFL ultimately said it was a problem related to a “network cable malfunction.” Microsoft said its tablets have functioned without a single problem in the past two seasons.
Despite those hiccups, the way the Surface is utilized to help teams win games is certainly an impressive achievement for Microsoft. Tablet sales are also up, with revenue in the company’s Surface business climbing 56 percent during the March quarter from the same time period a year ago, to more than $1.1 billion.
“These partnerships are a lot of work,” Capossela said. “It’s not, ‘sign the contract and be done with it.’ It takes a huge amount of work to make sure things go well and to train everybody on the devices.”
The sponsorship also extends beyond the sidelines, to TV advertisements, the company’s augmented reality HoloLens device, and Microsoft’s Xbox One, which this week is hailed as the “official game console of the 2016 NFL Draft.”
The Real Madrid deal, reported to be at $30 million over four years, is different than what Microsoft does with the NFL, as the company works more closely with an individual team versus an entire league. Real Madrid, the world’s most valuable sports franchise, is using Microsoft’s technology for both fan-facing products, as well as front office business operations and on-field player performance.
Real Madrid CEO José Ángel Sánchez told GeekWire last year that the deal would “transform” how the club connects with fans and runs its business.
“Technology is a tool to bring these people together and create a relationship between us and them,” he said. “We’re aren’t a software company, but in the end we admit that these technologies from Microsoft are really helping us transform the club. That is true.”
Sánchez also used the word “passion” when describing the partnership.
“We have more than 450 million fans, and it is quite challenging to create relationships and engage with them,” Sánchez told GeekWire this past May. “The essence of our partnership with Microsoft is really based on the passion that fans have for the club.”
Capossela said the Real Madrid deal is much more of a “technology partnership” versus what Microsoft does with the NFL.
“They are re-platforming their company on Microsoft’s cloud and they wanted to do a complete technology renovation of the way they were approaching their company,” he said. “For us, that is in some ways the perfect marriage where you have sports club that has a good fanbase and a great brand and is looking for a technology partner.”
Microsoft has other deals with leagues like NASCAR and the PGA Tour. It also utilizes its Bing technology to make sports-related predictions, more recently inking a deal with the NCAA for March Madness-related picks. In addition, the company pays its hometown professional soccer clubs to have its branding on player jerseys. There are also plans to invest in eSports.
Microsoft, not the only tech giant tapping into the sports industry, continues to see more and more opportunities to partner with leagues and teams.
“We’re pretty full in the world of sports and not really looking for five more or even one more [deal],” Capossela said. “But boy, they come knocking right now.”