An inside look at what arguably might be the most extensive deal ever signed between an airline and a sports/entertainment/media company: Delta, the world's largest airline, and Madison Square Garden LP, whose properties include the self-titled venue billed as the world's most famous arena.
By Barry Janoff, Executive Editor
(Posted Oct. 29, 2009)
On Oct. 20, Delta Air Lines signed a deal to replace Continental as the official airline of Madison Square Garden LP. The alliance continued Delta's aggressive strategy to claim as many Big Apple sports teams as possible: under this and other deals signed this year it is now the official airline of the New York Yankees, Mets, Knicks, Rangers and Liberty (Continental remains the official airline of the New York Giants, JetBlue is the official airline of the New York Jets). These partnerships have been activated in conjunction with the Atlanta-based airline's recently detailed plans to create a domestic hub at LaGuardia Airport and to add more than 30 international routes at JFK, both in New York.
As part of the deal with MSG, Delta will have marketing presence across all MSG properties, a "top-tier" partnership in MSG's extensive college basketball schedule and concert series and the first "signature partnership" in the renovated Madison Square Garden, a $500 million undertaking that is scheduled to be completed for the 2011-12 season. Madison Square Garden LP is a subsidiary of New York-based telecom, entertainment and media company Cablevision.
Delta is considered the world's largest airline in terms of jets flown, flights and operating revenue, which exceeded $6 billion in 2008, according to the company. As such, its strategy involving sports and entertainment deals extends well beyond New York. The carrier also has alliances with such MLB teams as the Atlanta Braves, Cincinnati Reds and Detroit Tigers; and the NFL's Minnesota Vikings and Seattle Seahawks. The deal also gives Delta presence at Cablevision properties including the Chicago Theater and Boston's Wang Theater; and New York venues that attract both domestic and international visitors including Radio City Music Hall, WaMu Theater at Madison Square Garden and the Beacon Theater. In addition, the partnership includes such media outlets as MSG Network, MSG's Web sites and cable music channel Fuse.
Scott O'Neil, president of MSG Sports, spoke with NYSportsJournalism.com about the impact of the deal on fans, marketing and the partners involved.
NYSportsJournalism.com: How and why did the Delta deal happen?
Scott O'Neil: A contract with a strong, long-time partner [Continental, which had been the official airline since 1998] was coming up for renewal. The major difference this time is that Madison Square Garden is undergoing a $500 million renewal, so for the first time we are bringing together music, media and sports assets in terms of one offering. From our aspect, we are offering New York and all of those consumers, travelers and fans with discretionary spending. We spoke with many different airlines in trying to find the right match while also taking into consideration the current economy. We were looking for a partner that is very strong, that understands marketing and the marketplace and that is as passionate about its brand and its customers as we are about ours.
NYSJ: From MSG's perspective, what key factors made Delta the right airline partner?
O'Neil: Delta has been making an aggressive push into New York. They have a 50% market share of travel into and out of New York. From our point of view, in speaking with them, signing a deal [with us] made a great deal of sense. Not only because of our venues and the number of people who come through our venues, but also because our fans are the ones with discretionary income and are most likely to fly for personal and business reasons. We have Corporate America coming to our Knicks, Rangers and Liberty games. They come to Radio City Music Hall, especially now for the Christmas Spectacular [which runs Nov. 13-Dec. 30]. So it was a perfect mix and match for [the type of consumers] Delta is seeking. MSG and Delta will be together for a long time, so we certainly will look at a lot of opportunities and options to make the partnership as strong and as successful as we can. This relationship will be measured in how greatly we can enhance each other's business.
"MSG and Delta will be together for a long time. This relationship will be measured in how greatly we can enhance each other's business."
NYSJ: What are the benefits for MSG to have an official airline?
O'Neil: For us, first and foremost, we have some very marquee brands as marketing partners. So when you talk about Coca-Cola, American Express and Anheuser-Busch, Delta definitely fits right into that mix, especially as the first "signature partner" for the renovated Madison Square Garden. So we are looking for top-tier brands with which to associate. Delta is the world's largest airline, so there isn't any better partner. Second, when you look at the properties we offer it covers a strong mix of music, entertainment and sports. Fuse is a national music channel, so that is an opportunity to tie into Delta's on-board music offering. We can showcase the Radio City Christmas Spectacular. We can use [Delta's in-flight] Sky Magazine as a marketing vehicle. And there is a tremendous opportunity to tap into the SkyMile frequent flyer customers, just as Delta might tap into our season-ticket holders.
We also took into consideration Delta's charter business. While we fly our own plane, having two teams active in the fall, winter and spring means we will be on 18 of their charters [this season]. (Editor's note: Delta owns Northwest Airlines, whose charter airline division has a multi-year deal with the NBA to handle a majority of the league's team's travel needs during the season.) So this is a terrific fit in many ways.
NYSJ: How will this deal impact MSG and Delta beyond New York?
O'Neil: It makes sense from a global business standpoint for both sides. We are pretty fortunate that we attract visitors from around the world. Fifty percent of the individual tickets for Knicks games last season were purchased by international tourists. So when you look at the demographics of the international marketplace we certainly have a major presence. Domestically, our properties include the Chicago Theater and Boston's Wang Theater. Our focus is to connect Delta with the people from Corporate America who are sitting at our games and in our theaters. As I said, we are very uniquely positioned in that if you walk around during a Knicks or Rangers game or at a concert or show, it's a Who's Who of Corporate America. And now, with technology and the way people can buy seats — and the way we have the opportunity to connect with them and have them connect with each other — companies that are looking for business-to-business opportunities can't find a better organization to partner with. We go cross-venue and cross-platform.
NYSJ: When you are planning activation, will there be marketing that focuses on fans who attend Knicks, Rangers and other sports events and different marketing targeting people who attend concerts?
O'Neil: People at Knicks games and people who attend concerts or events at our venues will know that there is a relationship between MSG and Delta. But there are distinct opportunities to reach fans and consumers at each venue and in each particular environment. So if you go to see the Allman Brothers at the Beacon Theater, for example, we will seek with Delta to capture the imagination of the fans in that environment. And, obviously, we won't try to push the New York Knicks at the Wang Theater in Boston.
NYSJ: Do you perceive expanding marketing boundaries with this deal, perhaps with Delta patches on team uniforms or signage on the court or ice?
O'Neil: For this first year, marketing will be creative but in a more traditional way. Some of those ideas are terrific, and I always love using new inventory, in particular if it's a brand that needs to pop through the pages and let the world know who they are. But Delta is as ubiquitous as AmEx, Coca-Cola and Anheuser-Busch. So from our perspective, the focus will be how do we give them the best reach and the best access to our fans, and tie that into how do we come up with the most creative inventory. We have already done some creative things to get this partnership underway, such as handing out scratch-and-win cards for seats at Madison Square Garden and on Delta flights. And there certainly will be more opportunities like that. But right now this is about ringing the bell on the partnership.
NYSJ: Several airlines have recently ramped up deals with sports teams, including Delta, American Airlines, United, JetBlue, US Airways, Southwest and AirTran. Looking at the category, what do you see as the advantages for the airlines and their sports partners?
O'Neil: Going back to our fans, they have proven to be spenders of discretionary money. They index high in terms of corporate travel and vacation travel. So if you are looking for decision-makers in corporate or family vacation travel, sports teams provide an outstanding venue to reach them. This is where you go. Also, sports fans are a very captive audience and they are very loyal consumers. Our hope, our wish, our expectation is that when Knicks and Rangers fans are flying, all things being equal, they will choose to fly Delta. That is a pretty good expectation and has proven itself out with all of our partners.