BOULDER BOWLING BELLES

Background

Bowling is a fun, fast-paced sport that traces its roots all the way back to ancient Egypt and the Roman Empire. The modern ten-pin bowling style was popularized in New York City in the late Nineteenth Century, and competitive bowling leagues have been formed throughout the country ever since. Within a bowling league, teams composed of three to five players compete against one another in head-to-head matches, playing three games to declare the match winner. Teams may win cash prizes and awards for winning weekly matches, but the real prize is being named league champions. Many league champions are invited to compete in regional competitions in hopes of moving on to a national competition. Though bowling was featured in the 1988 Olympics, the sport subsequently lost popularity; many wondered if it would ever be a popular competitive sport again.

While bowling has begun to make a comeback, bowling leagues need to achieve some form of accliam in order to continue the momentum. The sport has picked up so much attention that league competitions draw a substantial crowd in some parts of the country. Bowling alleys have been rejuvenated by league competitions and turn major profits from hosting the matches. Bowling has taken on new life, with over twenty international competitions bringing in representation from bowling leagues all over the world. The sport has even been considered as a potential event in the 2020 Summer Olympics.

Over time, bowling has transformed into a sport with dynamic all-female teams, known for their colorful uniforms and creative team names. Modern bowling leagues have made strides in moving away from the routine of weekly competition and by emphasizing flashy showmanship, often coupled with hipster irony. These efforts have begun to attract spectator audiences, who view bowling as unpredictable and unexpectedly competitive.

While the sport has become highly popular in recent years, it remains a niche activity, surviving entirely on the backs of volunteers who have a strong "do-it-yourself" work ethic. With the right amount of sponsorships, bowling leagues have the potential to gain national attention and regain competitiveness within the sporting world.

The Parties

Boulder Bowling Belles

The Boulder Bowling Belles, founded in 2008, are a premiere, ten-pin bowling team that competes in matches every weekend during summer months. The Belles are a part of an entirely volunteer-run bowling league in Boulder, Colorado, which consists of five competition teamsfour regular teams and one all-star team that travels to competitions around the United States. In addition to fielding competition teams, the league offers a junior level for female athletes aged 7-17, as well as co-ed and women's-only bowling-based fitness programs and training camps.

The Belles are considered a local treasure in Boulder due to their flashy and exciting bowling style, their record of success, and their devotion to the community. The Belles participate in and host numerous fundraisers and events in conjunction with other league teams in an attempt to raise awareness and financial support in a variety of areas, including community health and children's services.

In their heyday, the Belles were featured in a variety of different media outlets. In 2010, alone, the Belles were featured on NBC's Kathie Lee & Hoda, The Ellen Show, Good Morning America and ESPN's SportsCenter; the Belles were invited to bowl in the White House bowling alley with President Barack Obama as a celebration of the sport's history in America.

However, managing a small professional sports team often turns out to be an expensive endeavor. Bowling has its own unique expenses, making balancing the Belles' budget a perpetual challenge. Funding the Belles is difficult due to the bowlers' unique gear specifications, transportation needs, and financial obligations connected with renting out an appropriate-sized bowling alley equipped with adequate liability insurance for athletes and spectators over a full season of practice and competitions.

While the Belles currently enjoy a number of local sponsorships, they are always open to discussions about new potential sponsorship or partnership relationships; they actively solicit sponsorships from various companies. Though the Belles advertise five pre-set partnership packages ranging from $10,000 to $50,000 per season on their website, they have found success working with larger contributors to customize partnership packages that specifically meet the potential partners' unique needs.

Unlike teams in larger cities, which can rotate the bowling alleys they use to avoid "wearing out their welcome," the Belles now operate out of Alley Cats, an establishment that helped them in the infancy of the program. This requires renting out the entire alley for a high fee in order to have productive practices. Generally, the volume of income generated for the local alley by the Belles' competitions has facilitated a good relationship with the business. However, because the Belles take up the entire alley, which precludes walk-in customers (the alley's largest source of income), they often have trouble convincing the bowling alley to allow them to use the facility as frequently as their many activities now require and they often cannot afford the high cost of renting out all of the lanes at once.

Power Up Sports Drink

Power Up, a sports drink company launched in 1987, remains a leader in the beverage and sports industries. In 1988, Power Up sponsored its first athletic event; the next year, it sponsored its first athlete. Since that time, Power Up's partnership and sponsorship portfolio has expanded to include record labels, sports teams, and athletes in major league and extreme sports.

In addition to its exciting portfolio of athletes and artists, Power Up is committed to giving back through its charity, Active Life. The charity focuses its efforts on funding research aimed at combating juvenile diabetes. Active Life hosts a variety of sports-based fundraising events, including the Active Life World Run, an innovative global race.

Particularly when it comes to action sports, Power Up believes its competitors merely dabble in the concept of sport-sponsorship. Instead of focusing on the "Big Four"i.e., baseball, basketball, football, and hockeywhich saturated with big-budget marketing teams and exclusivity contracts, Power Up's marketing team has always sought out lesser-known leagues and events so that they can get in on the ground floor, be cost-effective, and work to reshape the sport in question using the company's action-based image and brand.

By utilizing this business model, Power Up has become a major player in "underground" sports and sporting events, boosting them into the mainstream with advertising and sponsorship. Power Up is one of the few recognizable and omnipresent sponsors at most regional sports events. The company takes great pride in being one of the only recognizable, non-local sponsors at various E-sports events, such as the Power Up Proving Grounds, a competition featuring the computer game Star Commander II.

In 2011, as part of Power Up's commitment to winter sports athletes, the company constructed a private skiing and snowboarding park at Squaw Valley Ski Resort near Lake Tahoe, California. After this facility proved to be a great successboth in the athletes' performance and in recruiting new athletes to the brandPower Up built a number of different sport-specific training facilities across the country. Just last month, Power Up completed construction on Mile High Forge: a state-of-the-art training facility and events venue in Denver, Colorado, which is specifically geared towards its smaller sports athletes. The fifteen-acre Denver campus features three repurposed 50,000 square foot warehouses, each customizable for the needs of the sporting event. The campus also features a gymnasium and a full-service fitness center.

The Negotiation

Recognizing an opportunity to solve their facility problems once and for all, the Boulder Bowling Belles approached Power Up regarding the possibility of entering into a long-term lease of one of the three repurposed warehouses at Mile High Forge. Power Up was intrigued, sensing the possibility of once again investing in a burgeoning sports market. Power Up responded to the Belles by offering the facility as part of a new long-term relationship between the two parties. The parties agreed to send their legal representatives today to discuss the terms of the contract. The Belles' attorneys have been granted full authorization to be creative in reaching a mutually beneficial agreement with Power Up. By the same token, Power Up's team has been given the authority to agree to any solution that will advance the company's interests.

CONFIDENTIAL FACTS FOR BOULDER BOWLING BELLES

Since a recent upsurge in popularity over the last twelve months, the Boulder Bowling Belles organization has been in flux. While the Belles' more seasoned members and volunteers remember having to move around from facility to facility from 2008 to 2012, the Belles had hoped that their working relationship with Alley Cats would endure. But nothing lasts forever in real estate, and the news that Alley Cats would be raising its rental price was unfortunate, though not unexpected. After all, bowling in Boulder has become a popular pastime among residents.

While the Belles worked out a manageable practice schedule with members contributing funds when extra practices are needed, this is only a temporary solution for a long-term problem. Moreover, Alley Cats is significantly smaller than many other alleys that host regional leagues, which gives the Belles less room to grow in terms of members and audience. Furthermore, the Belles' coffers are beginning to run dry, as Alley Cats raises rental fees every month. The Belles' accountant estimated that the Belles will subject themselves to a $75,000 deficit each year they stay at Alley Cats. Although the Belles were able to pay for the remainder of the 2016 season, the 2017 season is in doubt. Without access to a cheaper bowling facility or significant sponsorship funding, the Belles run the risk of being forced to disband.

Fortunately, the Belles do have options. A few weeks before their initial conversation with Power Up, the Belles were approached by the sports-marketing division of Monster Energy Drink regarding a potential three-year partnership deal, which would begin with the 2017 season. Stating that it was looking to branch out into the bowling market for the first time, Monster offered the Belles a partnership deal that would allow them to either (1) remain at the Alley Cats facility or (2) seek out a more optimal venue.

However, Monster's offer comes packaged with numerous restrictions and requests that make many senior members of the Belles uncomfortable. Along with the normal incentives associated with their top-level sponsorship package, Monster would like to have all of the female athletes wear a large Monster logo on the front of their jersey for all matches and media appearances. Monster is also insistent upon a comprehensive exclusivity clause that, depending on the package the Belles choose, would prevent the Belles from partnering with any other beverage company or selling, sampling, or advertising any other beverage brand at their matches.

Monster presented the Belles with two different proposals: $100,000 per year to be the exclusive sports drink of the Belles or $150,000 to be the exclusive beverage of the Belles.

The Belles have expressed concern that partnering so heavily with a large corporation like Monster would make them look like "sell-outs," risking alienation of local fans and the edgy bowling counter-culture they have worked hard to cultivate. At the same time, senior members acknowledge that they may not have much of a choice if they are unable to find a better sponsorship.

When Power Up finished constructing the Mile High Forge earlier this year, the Belles saw a great opportunity. Even though the Belles would have to commute to Denver to use their facility, the team believes it can expand its fan base and potentially split its season matches and practices between Alley Cats and Power Up's Mile High Forge. Though Power Up is owned by a large corporation, its efforts to bring under-the-radar sports into the public eye via funding and cross-marketing efforts intrigue the Belles. Accordingly, the Belles were thrilled when Power Up responded enthusiastically to their initial contact.

Power Up's request to expand the negotiations beyond a simple tenancy agreement initially surprised the Bowling Belles, though they are cautiously optimistic about the prospect of working with the sports beverage company. The Belles recognize the opportunities presented by being sponsored by an established, financially stable organization, but they want to ensure that if they enter into a relationship with Power Up, the company will understand and respect the characteristics that make them so appealing to their fans. To that end, in negotiating a potential deal with Power Up, the Belles need clarification on certain aspects of Power Up's position if the parties are to reach a beneficial agreement.

Generally, so long as doing so will not interfere with your client's priorities, the Belles hope you will be creative, both in thinking of additional steps that Power Up can take to advance the Belles' interests, and in securing Power Up's agreement to take those steps. The Belles' senior members have left the strategy of the negotiation to your discretion; they will agree to anything that is in the organization's best interests.

Tenancy Terms

Seeking to expand their options while making a facility rental economically feasible, the Belles came up with the idea of simply renting a facility at Mile High Forge for matches and individual practices rather than leasing a dedicated facility for the entire year. Though continuing to share a facility may be stressful for the Belles, and the inability to practice their normal four times per week on match weeks may negatively impact the team's overall product, the Belles' members and volunteers have given their approval to the idea. After meeting with the team accountant, the Belles determined they can spend no more than $75,000 per year in rent for such a "rent-a-day" facility.

The Belles need a facility in a good neighborhood with adequate parking, security, and the opportunity for public assemblage for events. Power Up's facility meets all of these requirements. The fact that the facility is owned by Power Upan organization that seems to understand and reflect itself in the Belles' counter-culture image and valuesis icing on the cake.

However, before the Belles will agree to any deal with Power Up, partnership or otherwise, they want to ensure that their tenancy in Mile High Forge will include access to other key features. Ideally, Power Up would be able to install a sufficient number of bowling lanes reserved for the Belles' use, or let the Belles maintain reservation of a set number of the lanes for practice and matches during the season. The Belles currently transport and store portable bleachers to set up at Alley Cats when they have a big match that will draw a crowd. Anticipating that Power Up may open the bowling alley for the public use, the Belles are prepared to continue taking down the stands after matches. Along with the various costs associated with storing and transporting the stands every week between matches, the right to store the bleachers somewhere on Mile High Forge's campus (or even betterin the warehouse, itself) would allow the Belles to avoid roughly $750 per month in third-party storage costs.

Power Up initially quoted the Belles $450 per hour for use of the facility. The Belles are looking to use the facility for ten (10) home match dates, from 1:00 p.m. to 11:00 p.m. As meeting this price would be challenging, the Belles are hoping Power Up will come down on this price in exchange of a longer-term lease or a more comprehensive partnership. In a perfect world, the Belles would love to be able to make separate deals with both Monster (sponsorship/branding) and Power Up (lease) to allow for additional flexibility.

The additional money that Monster would be able to provide, which would require some accommodation and compromise on Power Up's part, would allow the Belles to be flexible. If the Belles are able to do both deals, they would look instead to rent the facility from 2:00 p.m. to 11:00 p.m. on match days and 1:00 p.m. to 7:00 p.m. the day before, allowing for practice and bleacher-installment time. However, the Belles are aware that having two sports-beverage companies under one roof creates a unique (and possible non-ideal) situation for the brands. The Belles would certainly benefit from being able to work with both Monster and Power Up, but first and foremost they want to ensure that there is no potential liability for breach of contract in either potential partnership agreement.

The Belles understand that Power Up will likely be concerned about liability insurance. Bowlingespecially in the presence of large crowdsis not as dangerous as high contact sports, but injuries can still occur. The Belles would like to reassure Power Up that they have budgeted for liability insurance and are experienced enough in this matter to obtain the necessary coverage. The Belles will also agree to indemnify and hold Power Up harmless from any injuries suffered during play if Power Up requires this type of clause in the contract.

Partnership and Branding Issues

A full-season partnership on the scale of Power Up's could provide a financial boon for the Belles' organization. Furthermore, a Power Up partnership could help legitimatize a sport that most people do not recognize as anything beyond a Saturday night pastime. However, the Bowling Belles have prided themselves as fiercely independent with strong counter-culture flair. On the other hand, particularly where corporate branding is involved, the money and access of a Power Up package would bring media exposure and coverage to their fans, which could outweigh their counter-culture ideals.

Although the Belles understand that they cannot necessarily have it both ways, they are striving for a long-term relationship with Power Up that gives them what they need while maintaining their independent spirit. If both of these goals can be reached, the Belles would be more willing to be flexible on other terms Power Up might like to see included and to allow for a longer-term deal, preferably of two-years to start with.

On the other hand, if Power Up does not give the Belles enough in the deal, or if Power Up is looking for a relationship that aligns the Belles uncomfortably close to Power Up's brand, the Belles would be less receptive to a partnership-type deal. Specifically, the Belles will look to limit both the deal's duration and to the focus on the facility versus a sponsorship.

Partnership Rights Packages

According to their printed partnership materials, the Belles' sponsorship package for a seasonal contribution of $25,000 to $75,000, automatically includes the following items: (1) three, on-site banner signs to be placed either at the ends of bowling lanes or throughout the alley; (2) a slide-show advertisement projected onto a screen; (3) a full-color program advertisement; (4) the right of the partner to donate products or services as raffle prizes; (5) eight VIP or sixteen general admission tickets; (6) a premiere location vendor booth with on-site sampling; (7) the right to provide printed inserts in event-related materials; (8) an in-venue promo spot; and (9) naming rights to one match per season. The Belles will also provide logo rights, access to the team for personal appearances, and recognition of the sponsor in community outreach efforts. A contribution of more than $75,000 includes an additional banner sign, two additional VIP or four additional general admission tickets, the naming rights to one additional match per season, a scoreboard logo, and the naming right to a special award of the match.

While the Belles generally prefer to stick to their preset partnership packages for smaller partners, they are flexible to accommodate partners who go above and beyond for the Belles. Given that Power Up would be allowing them use of a facility and presumably giving them a steep discount on the facility's rent, the Belles are more than happy to accommodate Power Up's needs so long as they do not compromise their counter-culture values.

In particular, the Belles are hopeful to avoid giving up any logos on the athletes' jerseys, as a major part of the Bowling culture is allowing individual teams to express themselves through unique and colorful uniforms. Furthermore, Monster has already requested a uniform sponsorship, and while the Belles are hoping to negotiate with Monster on this point, they want to remain open to the possibility. Instead, the Belles are willing to give Power Up the ability to put a logo on the athletes' bowling balls if Power Up is willing to provide more than $125,000but only if it is necessary to finalize a deal.

Exclusivity

The Belles have always been hesitant to give any kind of exclusivity in partnership deals. As a small organization with a consistently small budget, the Belles do not want to limit their potential sponsorship and branding options. The team knows that its sponsors love to call themselves the "exclusive" sponsor of a particular organization, the potential harm that could result from limiting sponsorship opportunities generally outweighs the amount of financial contribution that sponsors are willing to provide for such an honor.

Considering Monster's offer, the Belles have calculated the value of exclusivity at $150,000. However, if Power Up's contribution is substantial and gives the Belles the freedom Monster is unwilling to provide, the Belles are willing to make an exception and give Power Up exclusive rights as the official energy drink sponsor of the team. In order for the Belles to grant exclusivity to Power Up, however, the deal must explicitly meet all of the Belles' needs.

If possible, the Belles are hoping to find a way that they can structure a deal in a way that would allow the team to partner with Power Up and Monster to some extent. But no matter what, the Belles are unwilling achieve their partnership goals if doing so will involve "selling out" their current independent image.

Can you help me with the terms to this negotiation?