From Microsoft to Zulily: Why the Sounders teamed up with Seattle e-commerce company that aims for rebrand

Seattle Sounders and Reign FC players have a little fun on stage at the unveil of their new Zulily branded jerseys. (GeekWire Photo / Kevin Lisota)

Zulily? Really?

That was the reaction from many Sounders FC fans on Thursday as Seattle’s pro soccer team announced its new jersey sponsor.

Gone is Microsoft Xbox, a globally-recognized gaming juggernaut whose logo adorned the rave green jersey since the club’s debut in the league in 2009.

In is Zulily, the lesser-known brand of a Seattle e-commerce company that quietly built a billion-dollar online business selling products to moms.

Sounders defender Roman Torres shows off the new jerseys on Thursday. (GeekWire Photo / Kevin Lisota)

Some fans weren’t exactly thrilled with the decision.

“I’ve purchased at least one jersey ever year since we joined the MLS. Pretty sure that streak is ending,” one fan tweeted.

“Sounders, striving to end toxic masculinity by alienating all their male fans… FAIL,” another wrote on Instagram.

So why Zulily?

For Sounders FC majority owner Adrian Hanauer, finding a new jersey partner was less about aligning the team’s fan base with a sponsor’s customer base — though he did note that more than 40 percent of Sounders fans are women. He said it was about making a deal with a local company that was “all in.”

“We want a great partnership,” Hanauer told GeekWire after the team’s media event on Thursday in Seattle. “We want to help a company evolve their brand, because if we do that right, they will continue to invest more and more resources into our organization. And our first priority is winning. We want to win and we want to impact the community. Those things work together.”

Terms of the deal were not disclosed, but most MLS clubs generated $3-to-$4 million per year on jersey deals in 2017. That number has likely risen as MLS sees record-breaking attendance numbers and club valuations that spiked 20 percent over the last year, CNBC reported.

“The resources are more resources than we were previously generating,” Hanauer said on stage Thursday. “Our league is on fire and growing and there’s a lot of tailwind. That was certainly a piece to the puzzle.”

Hanauer added that the team “was able to split off some assets and make some other things available to sell down the line.” Microsoft previously had the jersey sponsorship but also had naming rights of the field — “the Xbox Pitch at CenturyLink Field.” The Sounders will also have an opportunity to sell a second advertisement on the right sleeve of jerseys, beginning in 2020.

Zulily, which was acquired for $2.4 billion in 2015 by QVC parent Qurate, will also sponsor jerseys for Seattle’s women’s professional soccer team, Seattle Reign FC.

Paying millions for sports sponsorship rights is uncharted territory for Zulily. But Kevin Saliba, the company’s senior vice president of marketing — and a former startup colleague of Hanauer — called it a “natural fit.”

“We think there will be an adjustment period, but we want to show the hardcore fans that we are committed,” Saliba said. “We want to help bulid the sport and both teams in the community.”

The Sounders and Zulily on Thursday made a $26,000 donation to a Seattle’s Children’s Hospital cancer research initiative. They will also partner on a “Hack Day” for engineers to build new ideas using biometric data from the Sounders players.

Bill Predmore, owner and president of the Seattle Reign FC, also echoed the “natural fit” sentiment.

“We’ve got pretty progressive brand and we have tried to use the platform we’ve got to shape change,” he said. “In the conversations with [Zulily], it seems that they share that desire.” 

The jersey deals are part of a larger rebrand for Zulily, which also unveiled a new logo on Thursday. Saliba said Zulily has “really evolved and grown” since its early days of daily deals targeted to moms with small children. He said the company has a “huge” sporting goods business and sells sports apparel with brands such as Under Armour and Brooks Running.

“We started as a moms and kids business,” Saliba said. “We’re much more focused now on women or men, with or without kids.”

From left to right: Kevin Saliba, Zulily’s senior vice president of marketing; Adrian Hanauer, Sounders FC majority owner; and Bill Predmore, owner and president of Seattle Reign FC. (GeekWire Photo / Kevin Lisota)

For Zulily, which has more than six million active customers and posted $432 million in revenue in the most recent quarter, up 18 percent year over year, getting its logo on the jerseys goes beyond acquiring more customers — it’s also about attracting talent. Saliba said as the company has grown, “we haven’t had much of a branding impact in the community.”

“This is a big commitment to build our brand locally,” he said. “We want to be a prime place to work. We want to associate our company with winning teams like the Reign and the Sounders. We also want prospective candidates to think about Zulily first when they’re thinking about their next job.”

Zulily can sometimes be forgotten in discussions about top Seattle tech companies. But it is a huge employer, with 3,500 people around the world, including 1,300 in Seattle. It also has a major office in Columbus, Ohio, with a nearby distribution center and other warehouses near Las Vegas and in Bethlehem, Pa.

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Darrell Cavens and Mark Vadon launched Zulily in 2009 after meeting at Blue Nile, the Seattle online jewelry company Vadon founded a decade earlier. They took the high-flying startup through a successful IPO in 2013 but its stock sunk significantly before it was acquired.

Zulily has rebounded in the past few years. Its revenue growth is far outpacing both the parent company as a whole and other business units, and its customer base is on the rise. Former Amazon executive and Shopbop CEO Jeff Yurcisin now leads Zulily.

For Microsoft, meanwhile, this marks an end of an era for the company’s connection to Seattle pro soccer. Microsoft used the Sounders deal to promote various games — including ForzaHalo, and Gears of War — as well as its cloud-based gaming service, Game Pass. It also sponsored the Reign jerseys.

“Since the team entered the league in 2009, Microsoft has proudly served as inaugural title sponsor of the Seattle Sounders,” Chris Capossela, chief marketing officer at Microsoft, said in a statement. “It’s been incredible to see Sounders become one of the most successful and beloved franchises in MLS history – and to watch them contribute to the vitality and growth of soccer in the Seattle area. We wish the team and organization all the best.”

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