By Barry Janoff
May 9, 2012: Leonard Armato is a man with vision who has helped to shape sports marketing and business for almost 30 years.
In the late 1980s, Armato founded and through the 1990s was chairman and CEO of Management Plus Enterprises, which represented such athletes as Kareem Abdul-Jabbar, Ronnie Lott, Hakeem Olajuwon, Ahmad Rashad, Oscar De La Hoya and Shaquille O’Neal.
In the 2000s, Armato returned to the group he helped found in 1983, the Association of Volleyball Professionals, and was a driving force behind the global rise of AVP. That alliance brought to national and global prominence such athletes as Misty May-Treanor and Kerri Walsh, who won gold medals in beach volleyball at both the 2004 Athens and 2008 Beijing Olympics; and Phil Dalhausser and Todd Rogers, who won the men's gold in Beijing. All four are now in training for the 2012 London Games.
In 2010, Armato became CMO and president of Skechers Fitness Group. During his tenure, Skechers' sales nearly doubled to more than $2 billion, according to the company, driven in part by the growth of the Shape-ups brand, the rise of the men's division and the launch of the Go Run brand. This was accelerated in no small part by three successive Super Bowl ad buys, which featured the likes of Joe Montana, Kim Kardashian and French bulldog Mr. Quiggly, respectively.
Last month, Armato officially became chairman and managing director of sports and entertainment marketing firm Leverage Agency, New York, whoserecent list of clients includes the ACC, Ivy League, Harlem Globetrotters, Jimmy Kimmel Live, USA Volleyball, Nivea and H&M.
Armato, who will be based out of Leverage's new offices in Los Angeles, will work with agency founder and CEO Ben Sturner in such areas as sports and entertainment properties, talent and brands including marketing partnerships, strategic development, media distribution, licensing, branded content, social media and public relations.
Armato spoke with NYSportsJournalism.com about the current and future landscape of sports marketing, the power of the Super Bowl and the Olympics and how he will leverage his past associations with the likes of O'Neal, Montana, Walsh and even Mr. Quiggly at his new position.
NYSportsJournalism: What is the state of sports marketing and sports business regarding athletes as spokespersons?
Leonard Armato: The key here is strategy. To just do an endorsement deal is short-sighted. And truly, there is no institutional effort that goes along with that. What has to happen is that companies need to be aligned around a brand position that has been embraced by an athlete. If an athlete creates and builds a brand position, and you get a variety of companies to embrace the same positioning and core brand values, then there is a halo effect.
NYSJ: Who has done that among current and recent athletes: LeBron James? Michael Jordan?
LA: I don't think LeBron James has done that. He has made a bunch of disparate deals, which is fine. I don't know if he stands for something right now that people can grab on to, although this could change in the future. Michael Jordan has done that. Nike took the bull by the horns and led it. Jordan became known for hard-working affluence at the highest level. And he was able to align a number of companies around that. Ultimately, the Jordan Brand, which is institutional, grew out of that. It is the highest level of style, taste, fashion, performance. That is what Jordan really stood for.
NYSJ: Is it accurate to say that you see this as a short list?
LA: Yes. Because, as I said, to do it right it has to be far more strategic than transactional. There are only a few people who have converted their celebrity status to brand equity. Tiger Woods is one. He had bit of a falling off, but he still has that core equity around him. In other categories, Martha Stewart has done it in the space of home furnishings and homemaking. Cindy Crawford is doing it with JC Penney.
"LeBron James has made a bunch of disparate deals, which is fine. [But] I don't know if he stands for something right now that people can grab on to."
NYSJ: What did you learn at Skechers about the pros and cons of using athletes or celebrities as spokespersons and the power of Super Bowl marketing?
LA: It only works if you have a remarkable product or service, and if you can build remarkable creative around it. Robert Greenberg, the CEO of Skechers, bought ad time during Super Bowl XLIV (in 2010). He wanted to use it to help launch the men's business. So we created a campaign around Joe Montana (NFL Hall of Fame quarterback who retired in 1994) in which Joe said he felt so good wearing Shape-ups he might seek a comeback. We also had a similar one with (NBA Hall of Famer) Karl Malone. We created brand value that said you should get more out of every step. It was a campaign about exercising, but showed that you could exercise not just by going to a gym and working out but by wearing Shape-ups to do the things you do in everyday life. That was attractive to women. But what was completely unexpected is that we found about a third of the people who bought Shape-ups were men. That 'Get Back Into the Game' campaign attracted a lot of attention and helped to launch our men's division. It became a big win for us.
NYSJ: What was the strategy behind moving from Montana to Kim Kardashian?
LA: In Super Bowl XLV (in 2011), we wanted to get into pop culture. So we built a campaign with Kim. She is not generally known as someone associated with [intense] workouts, but she is known for keeping her body fit and tone. So she started to wear Shape-ups, and talked about them on talk shows, during interviews, on her blog, her Web site, to her followers on Twitter (which currently number more than 14.5 million). And we spun that out into a Super Bowl commercial. She would say or write, 'I'm not going to tell you about my Super Bowl spot, but I'm going to be breaking up with someone!' Which caused a whole social conversation. And as the Super Bowl got closer, she would say or write, 'This is going to be a steamy spot! I hope it makes it past the censors!' So we spent [$3 million] but were able to leverage that into a tremendous amount of earned media.
NYSJ: And the next year, why did Skechers go from Kim to Mr. Quiggly?
LA: When we were planning our commercial for Super Bow XLVI, we found that a lot of people wanted to know if Kim would be coming back. When it came out that we were using a French bulldog named Mr. Quigley, we received a lot of press saying that Kim had been replaced by a dog. Which wasn't the case. We were doing a campaign to launch our Go Run line, and Kim was not really known for running. But it became a hot social media topic. The spot finished among the top commercials in post-Super Bowl ad rankings. That was in large part because it was a creative, well-executed commercial and also because a lot of people liked Mr. Quiggly.
NYSJ: You worked with Leverage and Ben Sturner going back to the Association of Volleyball Professionals days. Why did you decide now to become part of the agency?
LA: After I fulfilled my obligations with Skechers to help launch their performance brand and elevate their marketing in general for the company, Ben talked to me about joining Leverage and helping take the firm to the next level. When I was running AVP. I found that Ben and I were a really good combination. He would open doors and uncover opportunities in the marketplace. We would walk in together and build some nice partnerships with companies such as Cuervo, KFC, Progressive and Nivea in a short period of time. When I moved to Skechers, we used Leverage to identify sports marketing opportunities, and then also leverage those opportunities for PR and social campaigns that would be companions to the main opportunities we were working on.
NYSJ: Was there a specific campaign or athlete that stands out for you?
LA: Leverage identified Meb Keflezighi for us, who at the time was a runner with Nike, but then joined Skechers to help launch our Go Run products. We expanded that relationship when he wore Skechers Go Run in the 2011 ING NYC Marathon (during which he finished sixth after having won the event in 2009). In January, he wore them when he won the Olympic Marathon Trials for the 2012 Summer Olympics. So he will be wearing Go Run trying to win a gold medal in London (having won a silver medal at the 2004 Summer Games). That was a great coup for Skechers.
NYSJ: What do you see as your biggest challenge at Leverage?
LA: Making sure we identify brands with high-growth potential. And then making sure that Leverage utilizes its resources to the highest and best value to spawn rapid growth. I call it Leverage 2.0, which I see as elevating or transforming what has been a sales and PR organization to what I call a 'true brand accelerator.' A brand accelerator that provides all of the core competencies necessary to quickly grow value in a brand.
NYSJ: Where do you envision the biggest areas of potential growth?
LA: There is a very, very expansive universe of opportunities. The world today is bigger and faster than it's ever been. So there is real opportunity for brands to break through, even though it's more difficult to do so because the clutter is more vast than it's ever been. Look at all the value that has been created out of thin air. Value created from almost nothing. Twelve years ago, Apple was ready to go out of business, and now they are the most valuable company in the world. Seven years ago, no one had heard of Facebook. You have companies such as Instagram, which doesn't have a cent of revenue and is a billion-dollar company.
NYSJ: What do you think about the power of Olympics marketing and the athletes who are in the Games?
LA: Between now and the start of the Olympics is when a lot of these stories will be told. Some of these athletes have great back stories, such as Meb. People will know about him, and the other athletes representing America, over the course of the next few months. But unless they do something remarkable, like Michael Phelps, most people tend to forget them after about 60 days. So companies need to take advantage of this top-of-mind period, and then figure out how they can best leverage that beyond the perimeters of the Olympic Games. The challenge is to figure out how to best utilize these athletes so that their notoriety is not short-lived.
NYSJ: When you represented Shaquille O'Neal, you helped to establish him as a personality beyond basketball. What do you think of his first-year transition from the NBA to TNT as an NBA analyst?
LA: He has a really unique combination of qualities. He's larger than life. He's approachable. He has an engaging personality. And he's an entertainer at heart. This all works for him. When I represented him he was starting to combine his career as a pro athlete with entertainment and other ways to be in the public eye. He was preparing all along for life after the NBA. When it comes to sports marketing, he brings a complete package. And he does everything big: Music, endorsements, movies, living life big. He sort of broke new ground in that area and he is making the most of the opportunities available. TNT is a first step and I see this continuing to evolve for him.
NYSJ: As a resident of Los Angeles involved with sports, how realistic is it that the NFL will return to Los Angeles?
LA: The situation reminds me of the book, War and Peace. It just goes on and on. AEG (Anschutz Entertainment Group, the global sports and entertainment firm that is seeking to build the $1.5 billion Farmers Field in downtown L.A. and bring a franchise to the city) is an amazing company. They are committed to this mission. They have a lot of money and a lot of incredible brain power. You can never count [AEG CEO] Tim Leiweke out of anything. He always seems to produce results. If I were betting, I would say that it is going to happen within a reasonable timeframe now that they have some important pieces in place. But nothing is easy. It reminds me of when the Internet was being accepted by the public: It was an overnight success that took 15 years to happen.
NYSJ: Social media is a driving force in business and sports marketing. How will you utilize that with Leverage?
LA: Everyone talks about social media. Everyone talks about being on certain platforms and using the latest technology. These venues are important. But at the end of the day, if you don't have something remarkable that you are talking about, selling or amplifying, you are not going to get the desired results. At Leverage, we have to use our capabilities to identify those opportunities behind which we can put our resources. And then we can be strategic and very effective in marshaling the appropriate marketing resources to effectuate rapid growth.