Why Mercedes is interested in the NFL

October 11, 2011, 8:00 PM UTC
Fortune



The Mercedes A Class: Headed for America
FORTUNE — Mercedes-Benz, one of the planet’s elite luxury brands, is vying for greater visibility and appeal to mainstream buyers, as exemplified by a ten-year deal to renamed the Louisiana Superdome.

Terms of the agreement weren’t disclosed, though the amount was understood to be in the neighborhood of $50 million to $60 million for the decade.

Last week Mercedes-Benz marketing executives were surveying the enormous indoor arena, host of the next Final Four basketball tournament, the next BCS college football championship game and the 2013 Superbowl, not to mention home games for the Saints. The executives considered numerous spots where three-pointed stars and pictures of Mercedes vehicles could be located.

How about the 10-acre dome itself? “We’ll be able to make a statement for every blimp flyover,” said Steve Cannon, vice president of marketing for Mercedes-Benz USA. The three-pointed star “could be the only brand that will be visible from outer space.” Tom Benson, a Mercedes dealer in New Orleans, is owner of the NFL Saints.

Daimler AG, the German automaker that manufactures Mercedes-Benz, isn’t interested in being “elite,” explained Cannon. “We want to be aspirational.” In other words, exclusivity may have discouraged some potential buyers of Mercedes vehicles that the brand is out of reach. Daimler needs more customers worldwide as the rising cost of technology becomes too costly for automakers — even makers of luxury cars — that can’t reach a mass market.

In fact, Mercedes cars will be more affordable — and accessible — starting in 2014 when the brand’s smallest variant, the A Class, arrives in the U.S. Now sold in Europe, the A Class will sell for less than the C Class, which currently starts at about $35,000. The
most expensive Mercedes models sell for up to $200,000.

Which is why Daimler AG wants more exposure in the U.S. at football and basketball games, not just at The Masters golf tournament, which targets a smaller audience of extremely affluent viewers. “The Saints sell out every game,” said Cannon. The Superdome has 73,000 and probably its share of spectators who arrive in pickups. Many others, Mercedes is betting, could be convinced to consider the German luxury brand.

Daimler may have snagged a tremendously cost-effective marketing agreement, compared to similar recent naming deals in the New York
area for Citi Field, where the Mets play baseball, and the Meadowlands in New Jersey — each of which cost in the neighborhood of $400 million to $500 million over 20 to 25 years. In August MetLife Inc. announced purchase of the naming rights to the Meadowlands, where the football Jets and Giants play. “Football is a mass audience, a mass affluent audience,” Cannon said. “And unlike some cities, New Orleans is walkable and already set up with restaurants, hotels and lots of amenities for big party weekends.”

Mercedes is a name that is increasingly familiar across the southern U.S., due to the remarkable economic impact of Daimler’s Mercedes
sport-utility vehicle assembly plant in Tuscaloosa County, Alabama.

The Stuttgart, Germany-based automaker no doubt has concluded that New Orleans Saints season ticket holders, who pay $298 per ticket to
watch their team play in the Superdome, can surely afford to drive to the game in a Benz.