Archive for the ‘sponsorship’ Category

Sport selling out? Free-to-air V subscription TV

The much publicised financial troubles of satellite broadcaster Setanta in recent days have highlighted the increasingly complex media landscape facing sports rights-holders when they try to sell their most valuable assets.

Setanta owns rights to show a number of popular sports properties in the UK and Ireland including a package of live Premier League matches, the Scottish Premier League and the Indian Premier League (cricket). According to the BBC and others, Setanta is trying to renegotiate payment schedules due to cash-flow difficulties. It is clearly not in the interests of rights-holders to see their broadcaster go bankrupt but equally they are anxious to protect revenue they thought was guaranteed.

Subscription channels such as Sky Sports in the UK, Canal+ in France, ESPN in the USA and Eurosport have been competing with free-to-air broadcasters for TV sports rights for the last 20 years or more. Sky Sports claimed a major coup when they first bought the English Premier League rights for the 1992/3 season, with the result that football fans in England had to pay an extra subscription to watch live league matches.

Since that time rights-holders for the most popular sports properties in the UK and elsewhere have faced a dilemma. Very often subscription channels have bid more than free-to-air stations for exclusive rights because live sport is a proven business driver. However, the audience they attract is almost inevitably smaller than the free-to-air channels. The smaller audience may have a negative impact on sponsorship sales and it reduces the visibility of the sport.  

The basic criteria for choosing which broadcaster to sell the rights to are:
- who can offer the most money?
- who can offer the best coverage?
- what are the potential TV ratings? What will be the impact on sponsors and interest in the sport/event?
- how certain is it that the broadcaster will be able to pay?

In the UK, football, rugby union, rugby league, cricket, boxing and other sports have all grappled with this decision at one time or another. There has been significant debate about whether selling rights exclusively to subscription channels damages a sport (see the Daily Telegraph on English cricket, whose live rights are all currently held by Sky).
 
The success of Sky Sports in particular led to new legislation in 1996 designating certain sports events such as the FIFA World Cup, Olympic Games and Wimbledon Championships as “listed events”, which have to be offered first to free-to-air broadcasters. For “B” category events there must at least be an opportunity for free-to-air channels to show highlights. The UK list is currently under review and, following a European Union directive, similar lists now exist in numerous European countries. Naturally, rights-holders would like to have a full range of broadcasters to choose from but it is no longer a simple decision to opt for the highest bid. Mobile and internet rights further complicate the issue.

The new trend is for seasons, events and tournaments to be divided into chunks for sale to different broadcasters. This approach has the advantage for rights-holders that some of their most popular assets are available on free-to-air channels but the disadvantage that rights are not sold exclusively, perhaps resulting in lower fees. 

Setanta’s future seems to be in the balance. Expect to see rights-holders reduce the risks by packaging their sports assets for sale to multiple broadcasters. Expect also to spend 10 minutes with the remote control, frantically trying to work out which channel is broadcasting tonight’s match…

Drug-testers catching up?

Are the drug-testers catching up? In the last two weeks French tennis player Richard Gasquet has tested positive for cocaine, LA Dodgers baseball player Manny Ramirez has tested positive for a women’s fertility drug, and the test of a frozen sample from Olympic 1500m champion Rashid Ramzi proved positive for blood-boosting drug CERA.

All are facing significant penalties. Both Gasquet and Ramzi could receive a two year ban and Ramzi is likely to lose his gold medal. Ramirez has been given a 50 game suspension which sounds a lot but amounts to only two months. 

The stories have attracted considerable media interest and a certain degree of resignation: Athletics Weekly points out that Ramzi’s behaviour was regarded as suspicious because he raced only infrequently; comment in the New York Times concludes that Ramirez’s record will forever be tarnished; and, for Le Figaro, Gasquet had recently been failing to meet the high expectations raised by his early success.

Of the three, the positive test probably matters least to Ramirez who is 36 and has already made a large amount of money. Nevertheless, there will be an asterisk beside his name in the record books. Ramzi’s name will be removed from the 2008 Olympic results and it is perhaps unlikely that he will return to top-level competition. In contrast, the 23 year-old Gasquet should be able to make a comeback but he could face a long battle to climb back up the rankings.

For the last 20 years or more it has often been assumed that most of the athletes taking drugs were one step ahead of the testers. Quite simply, out of competition testing was sufficiently rare that those inclined to cheat could restrict their drug regime to the off-season and gaps between events. But gradually the net has been closing. The much-maligned “whereabouts” rule, which requires athletes to provide their location for one hour every day of the year, makes it much harder to evade tests.

Ramzi’s positive test is particularly significant because it was one of a batch of tests carried out on frozen samples produced during the Beijing Olympic Games. Samples can now be kept for a number of years and further analysis carried out when a new test for a banned substance becomes available.

The motivations for taking recreational drugs, as Gasquet seems to have done, are obviously different from those who seek to boost their performance unfairly but the punishment is the same. Ultimately, all elite athletes have to agree to abide by the rules of competition when they participate, which include avoiding  substances on the World Anti-Doping Agency Probibited List.

Positive drugs tests are damaging because fans become disaffected, sponsors get scared off, and parents worry about the risks of pushing their children into sport. However, when there are a handful of positive tests it serves as warning for those athletes who may be considering cheating and it may reassure those who are clean that the guilty will be caught. 

Cynical, world-weary sports fans will take some persuading but the drug-testers may just be catching up.

36 shots of sporting perfection

It’s rare in any walk of life to be able so say in a meaningful way that somebody has achieved perfection.  That is what snooker legend Stephen Hendry managed today when he scored a maximum clearance of 147 in the Betfred World Snooker Championships

For the uninitiated, that means Stephen Hendry played 36 consecutive shots without error, potting 15 red balls, each followed by a black ball and then the six colour balls in sequence. His opponent Shaun Murphy played one slightly careless shot to begin the frame (game) and then sat in his chair for the next 12 minutes while Hendry cleared the table (TV viewers in the UK can see a full recording).

Maximum breaks in snooker are relatively rare but becoming less so. Hendry has now hit 9 of them, a record he shares with Ronnie O’Sullivan. According to Wikipedia, there were 8 breaks of 147 in the 1980s, 26 in the 1990s, and there have been 34 since the start of the year 2000. The gradual increase is evidence of rising standards of performance, partly motivated by the large bonuses on offer (Hendry was rewarded with £147,000 for his feat).  

Sport is full of brief moments of perfection – any goal scored, any putt that goes into the hole, any ace in tennis – but it is rare to string them together in such a way. Stephen Hendry has won the world title 7 times so he knows more about perfection than most.

Snooker is popular in the UK and Ireland, although at a lower level than in the 1980s, and it has gained a valuable foothold in China, thanks to Chinese players creeping up the world rankings. If talented players from other countries could somehow emerge then it would have potential to expand considerably because it makes for compelling television that is cheap to produce. It attracts a diverse audience (a family friend aged 95 is an avid fan) when a couple of the biggest tournaments are shown each year on the BBC and Eurosport.

The development challenge is a considerable one: without major sponsorship it is hard to justify spending limited resources on an international programme which might not bear fruit for a number of years. And yet without leading players from a wider range of countries, snooker seems destined to remain primarily a British and Irish phenomenon. 

Australian Neil Robertson is the only player from outside the British Isles in the quarter-finals of the World Championships this year. It might be best for the sport if he ended up the winner, or perhaps Chinese player Ding Junhui could win it next year. But first they’ll have to get past Stephen Hendry.

Marathon Magic

Olympic champion Samuel Wanjiro (KEN) won today’s Flora London Marathon in a time of 2 hours, 5 minutes and 10 seconds, just over a minute outside the world record. It would be all too easy to read the time without realising its significance. To do so would be a mistake.

The marathon distance is 26 miles and 385 yards or 42.195 kilometres. Wanjiro’s average speed was about 12.6mph or 20.2km/h. If you want to understand how fast that is, have a go on a treadmill in a gym. You will need to be a good athlete to last more than a few minutes. The women’s race was won by Irina Mikitenko (GER) in 2:22.11, which is an average of 11.1mph - not much slower.

One of the remarkable features of the marathon is that all of the runners run the same course in similar conditions so every competitor knows their place. If you want an insight into what it takes to win in a global sport at the top level, the marathon is a good place to start.       

The fabled origin of the marathon event is a run by a Greek soldier called Pheidippides in 490BC from the town of Marathon to Athens (26 miles) to announce that the Greeks had beaten the Persians in battle. The unfortunate Pheidippides is said to have collapsed and died on arrival.  

Founded by Chris Brasher in 1981, the London Marathon has become one of a handful of great marathons of the world. More than 35,000 people completed this year’s event, ranging in age from 18 to 80 plus and taking anything from just over 2 hours to 8 hours.  As always, there was a fantastic assortment of uncomfortable and impractical costumes, mainly worn by charity runners competing for attention. Last year runners raised over £46m for charities and the figure for this year is expected to be even higher.

It is noticeable that the branding adopted by both sponsors and charities is increasingly sophisticated with colour coding and website addresses prominently displayed on many of the runners’ uniforms. Highly visible charitable marathon campaigns included Help for Heroes and Cancer Research UK.

The runners were cheered on by large crowds, who probably enjoyed the warm weather more than the competitors. There was an exceptionally friendly, enthusiastic atmosphere, which is reflected in positive media coverage (for example, the Daily Telegraph). Margarine brand Flora will surely be happy with the final edition of their 14-year sponsorship before Virgin Money takes over for the next 5 years.

It will be interesting to see what they have planned for 2011, which will mark 2500 years since the legendary run by Pheidippides (not 2010, as one angry mathematician points out). The story of that run has created quite a legacy.

Showcasing the city: the Boat Race got there first

Today Oxford University beat Cambridge in the 155th annual Boat Race on the river Thames. Despite its age, this most venerable of sporting contests is in some ways very modern: the route gives spectators both on the river banks and on television a chance to see London.

The Olympic Games and the Tour de France have a long history of using sport to draw attention to the attractions of a city but the recognition of the value of sports events for showcasing cities has grown in proportion to the level of sophistication of television outside broadcasts. Helicopters and moving cameras make a big difference.

A classic example is the Monaco Grand Prix, which helps the principality maintain its exclusive brand by having the Formula 1 cars race through the city’s streets. Similarly, the big city marathons which became established in the 1980s (Chicago, New York, Berlin, London, Tokyo and many others), are all routed past the major tourist attractions. More recent innovations include beach volleyball tournaments held in picturesque locations and the Red Bull Air Race series.

Students Charles Merivale and Charles Wordsworth probably didn’t have helicopters in mind when they organised the first Boat Race in 1829 but huge crowds lined the river banks and the event was a great success. I suspect that then, as now, many of the spectators were drawn as much by curiosity and the opportunity for a day out as by a passion for rowing.

With apologies to the many genuine fans of the big city sports events, it has to be said that they are much easier to watch on television than live. In the days before mobile phones and big screens, it was virtually impossible to follow marathons and cycling road races from beside the course but that didn’t stop the crowds or the sellers of refreshments and memorabilia. Sponsors such as Swatch (Beach Volleyball), Flora (London Marathon) and Xchanging (Boat Race) have long since recognised that there is a valuable opportunity to interact with the live audience at these events and to provide hospitality to important customers.  

Today’s Oxford crew, several of them with Olympic and world championship experience, can take satisfaction from their win in one of the fastest ever winning times of 17 minutes. For the Cambridge crew, who trained for six months for this lung-busting race of four and a quarter miles, there is at least the consolation that they can now rest their aching limbs.  

And the next time you see a sports event which features a spectacular city backdrop remember that the Boat Race got there first.

Enduring Appeal of 6 Nations Rugby

Last week Ireland clinched the Grand Slam in the 2009 RBS Six Nations rugby tournament after a dramatic victory in the final match against Wales in which the momentum changed several times in the closing minutes.

The celebrations of the Irish players and fans were enduring and heart-felt because it was the first time Ireland had beaten all of the other teams in the competition (the “Grand Slam”) since 1948.

This most traditional of tournaments, featuring England, Scotland, Wales, Ireland, France and Italy traces its origins to the late 19th century. France first took part officially in 1910 and Italy joined in 2000. Every team plays each other once over a six week period from early February to late March.

It might be expected that interest in such a tournament would wane: the same teams every year, predictable results, cold and wet weather. In fact, the tournament remains a huge success. The stadiums are always full and matches attract up to 5 or 6 million television viewers in the UK and France. Almost all of the major print and online sports media devote pages and pages to each weekend of action.

What are the reasons for this success? This is my view: 

- A simple format, which has not been tampered with
- The matches are broadcast live on Saturday and Sunday afternoons on free to air television
- The results remain surprisingly unpredictable and matches are often close
- It a

voids clashes with other major events (except the Olympic Winter Games one year in four)
- Historic and impressive stadiums
- Occasional innovations have generally proved successful:
     – Introduction of Italy into the tournament in 2000
     – Ireland home matches played at Croke Park (previously reserved for Gaelic Sports) while a new stadium is being constructed
     – First Friday night match held in 2009 attracted good viewing figures

There are lessons here for any sports event rightsholder. Tradition is a powerful asset but all sports events need to evolve. The RBS Six Nations has been nurtured and respected: it has moved with the times. 

The proof of the continuing appeal of the tournament is that in January the Royal Bank of Scotland, which has committed to significant cuts to its sports sponsorship after having to be rescued by British taxpayers, renewed its sponsorship of the Six Nations tournament through to 2013 for a rumoured £20m.

Performances in this year’s RBS Six Nations will be a major consideration in the selection of the squad for the British and Irish Lions Tour to South Africa in June. We can expect Welsh and Irish players to feature prominently.

No more Earthdreams

News of Honda’s imminent withdrawal from Formula One motor racing made the front page of the Financial Times on 6 December.

Formula One teams come and go. In fact, Honda itself first withdrew from competition in 1968, re-emerging in the 1980s. However, since 2006 they had been one of the highest spending teams (an estimated £300m per season) and had also supplied engines for others. This year Honda promoted environmental projects through their Earthdreams programme rather than raising large amounts through sponsorship. As a company deeply involved in racing, their departure is a major blow for motor sport.

Funding a Formula One outfit, a Barclays Premier League football team or an Indian Premier League cricket team is only possible for those with very deep pockets. The highly competitive nature of top level commercial sport leads owners and sponsors to spend extravagantly in the hope of gaining that crucial edge which can make the difference between winning and losing.

Unfortunately the law of diminishing returns applies: a player or driver costing £5m per season in wages is not necessarily five times more effective than one costing £1m. Despite generous funding and undoubted expertise, Honda had disappointing seasons in 2007 and 2008.

Even if Honda finds a buyer for their team Formula One’s governing body, the FIA, seems committed to trying to reduce costs by changing the regulations.

Meanwhile, the recent unsuccessful attempt by the French government to move the financial regulation of sport (mainly football) from national to European institutions was also aimed at curbing expenditure. 

A certain amount of tension between regulatory bodies and the funders of professional sports teams is probably inevitable because of their differing objectives. The regulators should be focused on the overall health of the competition, including financial sustainability, whereas the owners and sponsors of teams want to win at all costs and make money. 

The unavoidable truth in commercial sport is that in every league, in every race, someone has to finish last. And whoever is last is likely to lose a lot of money.

It is the big American sports who have come closest to solving this problem with their closed franchise system, selling broadcast rights collectively and giving weaker teams the first pick of talented young athletes each year.

In difficult economic times it will be interesting to see how effectively governing bodies, teams and sponsors manage to work together. Honda is unlikely to be the last big brand to exit in a hurry from an expensive, unsuccessful sporting partnership. 

Where General Motors leads…

Troubled corporate giant General Motors this week announced that it is severing its nine year sponsorship with Tiger Woods a year before the contract was due to end.

It is a significant step because GM has had its Buick brand on Tiger Woods’ golf bag since 1999. Only a few weeks ago they generated global media coverage when Tiger Woods played the role of caddy for an ordinary club hacker.

Almost simultaneously, GM announced the end of its 24 year partnership with the US Olympic Committee, worth an estimated $5m per year.

Tiger Woods has other endorsement deals and the USOC is in a strong position to attract new partners but the news provides stark evidence that athletes and sports properties at a slightly less exalted level are going to struggle to find corporate sponsors in the coming months.

Sponsorship has become mainstream to the extent that it is now difficult to imagine a televised sports event in most parts of the world taking place without commercial partners. As financial services companies in several countries are currently dependent on government backing, it will be interesting (nerve-wracking?) to see what the future holds for their many high profile sponsorship agreements (for example RBS 6 Nations).

Media reports suggest that GM is in deep trouble so they were probably compelled to cancel their deals but it is clear that retail banks, like a car company, cannot survive without significant marketing activity. What we will learn early in 2009 is exactly where sponsorship ranks among the marketing priorities for company directors when they are under real pressure.

There will also be some difficult decisions to make for governments that are effectively in control of certain banks. Public opinion will be an important consideration. Would the majority of the population rather see sponsorship cut to save money, perhaps crippling some sporting events and institutions? Or would they prefer that sponsorship agreements are renewed because they are fundamental to the business?

Now, more than ever, sponsorship must prove its worth.

Quantum of Bond for 2018

The latest Bond film, Quantum of Solace has proved a highly successful vehicle for sponsorship and product placement with no fewer than 12 partners from Sony to Aston Martin.

Over the years, James Bond has often demonstrated an interest in sport – skiing, speed boat racing, sky diving – even if the rules of the competitions haven’t always been as strictly enforced as us sports purists would like. Given the size of the global sports industry and the complex politics involved, perhaps it’s time for a Bond baddie from the sporting world. It could be a wealthy football club owner with ambitions for world domination or a sports politician with evil intent. A plot revolving around sport could easily incorporate the necessary range of exotic locations, expensive hotels and glamorous women.

Which brings me to the FIFA World Cup. The Football Association in England is submitting a bid for the 2018 World Cup. Competition will be tough with rival bids expected from the USA, China, Australia, Holland/Belgium, Russia, Spain/Portugal and possibly others. The English bid team is being assembled and the names of several high-profile ambassadors have already been mooted, including former United Nations General Secretary Kofi Annan, politician Baroness Amos, and footballers David Beckham and John Barnes. I would like to see James Bond as a bid ambassador. Actor Daniel Craig would certainly help the FA claim their share of the media spotlight at the various FIFA events during the bidding competition. His presence might also reduce the need for bodyguards for the other famous people…

I believe there is plenty of potential for a film tie-in. It would admittedly be counter-productive to base a plot on Bond rescuing the English World Cup bid from the clutches of dastardly rivals but there is surely scope for a throwaway line or a cheeky shot of a Sepp Blatter lookalike.

Andy Anson, the incoming chief executive of the England 2018 bid, will have a lot to do when he starts the new role in January. I hope he’ll consider putting in a call to 007.

Vanity Sponsorship

On 1 November on the Caribbean island of Antigua, the England cricket team was soundly beaten by the Stanford All Stars (almost the West Indes team) in the Stanford 20/20 competition. The victorious All Stars will be rewarded with a remarkable $1m US per player for this single match, with substantial amounts also available for the backroom staff and the cricket boards.

The brainchild of Texan businessman Sir Allen Stanford, the whole week-long series of matches has been condemned in much of the UK media as a meaningless money-making exercise (see, for example, Mike Atherton in The Times). With Sir Allen staging the matches at his own private ground, the whole spectacle gives the impression of a supreme act of vanity.

Question: What do you buy the man who has everything?  .
Answer: His own cricket tournament with top players competing for the biggest prize in the history of the sport.

What might be termed “Vanity Sponsorship” is by no means a new phenomenon in sport but it seems to be a growing trend. The most visible example is the spate of wealthy foreign owners of English and Scottish football clubs, such as Vladimir Romanov, majority shareholder of Heart of Midlothian FC.

The general pattern is that an astonishingly rich man or men (I haven’t seen any women involved) approaches a sporting institution and offers to invest sufficient money to restore them to their rightful place at the pinnacle of their sport. A business plan is brandished, which tantalises with a scheme for world domination in three to five years. In return for their largesse, the new owner or benefactor seeks public adulation and the right to have their whims indulged. Occasionally there are rumours of other political or economic motives as well.

One or two years later the relationship between benefactor and sponsored organisation sours, often resulting in the acrimonious departure of the sponsor, minus a large chunk of their fortune. The sporting institution somehow muddles on, amid much hand-wringing and calls for tighter regulation.

I am all for good financial governance in sport but a dose of realism is necessary. The leaders of sporting institutions are by their nature desperate for success. It would be surprising if they were to turn down a major investment, even with strings attached. Similarly professional athletes, who have short and insecure careers, will naturally welcome the chance of a windfall. Supporters may find the whole thing distasteful (as parodied in a Budweiser football advert) but ultimately they also want to see victory.

In short, rich men will continue to indulge themselves with vanity sponsorship and some of them will end up looking like fools. As for Sir Allen Stanford, he may just have spotted an opportunity to revive West Indes cricket that traditional brand sponsors had missed. Only time will tell.