World Athletics Championship and Sponsorship

The applause from the Bird’s Nest has barely died down, confirming the status of the World Athletics Championship as the third largest sporting event worldwide after the Olympics and the FIFA World Cup. Despite this, athletics is estimated to attract merely 1-2% of global sports sponsorship revenue this year – estimated by PwC at a whopping $45 billion[1]. Why this disparity?

An examination of the structure of athletics sheds some light on the challenges it faces. While interest in athletics focuses on the biennial World Athletics Championships and the quadrennial Olympic & Paralympic Games, sports like golf and tennis have at least four major tournaments per year. The appeal of global sport to sponsors arises from its exposure, and it is no surprise that sports which regularly feature in our calendars are the sports with high revenues from sponsorship.

For athletics, the problem is compounded by the distribution of elite athletes across a variety of events. When we tune into Wimbledon or the U.S. Open, we are guaranteed multiple clashes of the sport’s titans – but at the World Athletics Championships, the highest-profile athletes will rarely compete against each other. Usain Bolt and Mo Farah will never go head-to-head in the same way that Leo Messi and Bastian Schweinsteiger will in a cup final, and will consequently never draw in the same high level audience figures. With sponsors looking for partnerships that offer such large-scale, regular exposure, the disadvantage of athletics is clear.

Given the range of countries top athletes come from, athletics events ought to be able to attract more sponsors. But once again, structure leads to complications. The representation of each country by its national team leads to broadcast coverage focusing each country’s own athletes. The UK hears about the achievements of heptathlete Jessica Ennis-Hill, but she is comparatively unknown in other countries, where home-grown athletes take prominence. Only a few stand-out athletes (Usain Bolt, for example) have a truly global reach. The complexities of global presentation poses a threat to the coherence of the unitary message which sponsors generally wish to convey.

Sponsors who wish to associate themselves with Olympian qualities of ‘Faster, Higher, Stronger’ have perceived that it is more effective to achieve this with specific athletes, rather than with the event as a whole. The tactical choice to sponsor individuals rather than teams or events creates a system whereby the best athletes gain endorsement funding with which to enhance their already-glittering careers. Meanwhile, sponsorship is draining away from official governing bodies, and support for new athletes is no longer present. This cycle is indicative of the problems which athletics faces.

So what does all this mean for athletics? The recent news that Sainsbury’s has chosen to exercise a break clause in their sponsorship of British Athletics halfway through their contract and less than a year before Rio 2016 seems to illustrate the problem. For athletics to become more sustainable as a sport, steps must be taken to address the unique challenges which it faces.

Redmandarin’s David Powell talks to BBC World News about this topic…

 

[1] PwC Changing the Game; Outlook for the Global Sports Markets 2011–2015 

Working the Olympics

According to the International Olympic Committee (IOC), the Olympic Games offer brands the most powerful and valuable marketing platform imaginable.

It’s a tough one to argue against. After all, the Games have developed enormous worldwide media reach and their uniquely positive set of brand values mean that they’re a fit with the aspirations of more or less every commercial brand you care to mention.

Scour the internet for the various lists of the world’s strongest brands: many of them have hitched their wagons to the Olympic Games at one time or another. Continue reading

Celebrating a Crusader

First published in SportBusiness Magazine December 2011

As SportBusiness International this month identifies and celebrates the 20 men and women whose innovation have shaped the sports industry in 2011, I want to recognise one of the most influential and yet least talked about names in world sport.

Professor Arne Ljungqvistt’s past lives as a champion high-jumper, doctor, and professor of pathology have made him one of the world’s foremost experts on performance-enhancing drugs, and the tests to detect them.
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The Tipping Point

First published in SportBusiness Magazine November 2011

Malcolm Gladwell’s written a number of articles for grantland.com on the current state of the NBA during the four-months and counting of the current lockout. He eloquently argues the case that not only are NBA owners overstating their claims for financial penury but through their actions they grossly overvalue their own sports franchises relative to any financial return they could hope to achieve.

There’s now a growing consensus that games will be missed and that the players are going to end up on the losing side of a substantial change in salaries and contract length. Were this not such a predictable re-tread of 1998 it would be surprising that a league with so much reliance on the image of its players has the whip hand in negotiations
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Tread with care

First published in SportBusiness Magazine October 2011

The increasing importance of emerging markets has highlighted the complexities of sponsorship investment in key developing economies. As growth and marketing budgets stagnate in developed economies, major brands have switched focus to the developing economies and sponsorship budgets are starting to follow suit.

India is the most interesting case in point; there’s a confluence between corruption issues in Indian governance and a narrow range of available sports properties which has made India a challenging market for building differentiated sponsorship programmes.
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Etihad’s Fair Play

When Manchester City FC announced their £400m deal with Etihad Airways, cynics were quick to point out it seemed a clever way to increase the club’s income via a related Abu Dhabi business, ensuring MCFC’s defecit stayed the right side of the UEFA fair play regulations. Arsene Wenger and Ian Ayre quickly called foul and, along with others, questioned whether the process had been credible, fair, and whether the deal reflected market value.

Truth is this won’t have been taken to market in any meaningful sense, but MCFC aren’t a government entity and so have no obligation to do so. If they got an unsolicited offer significantly above the value they had assigned to those rights they would be entitled to take the offer. If that offer was from Coke, Samsung or any non-affiliated company no-one would have batted an eyelid.

This isn’t a process question, they can sell the rights however they like, it’s an ownership issue and a flaw in the fair play regulations.
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Sponsors and Governing Bodies

SportBusiness July 2011

The farce that was FIFA’s recent Presidential election raises some interesting questions about the relationship between brands and governing bodies.

Most media commentators have no appreciation of the enormous investment and business engagement required to work with a property like the World Cup, so the central thrust of all media coverage was the naïve question – are sponsors are about to walk away? The answer of course was no.
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Sustainable sponsorship?

SportBusiness June 2011

Over the last decade, the world of sport sponsorship has slowly woken up to the relevance of Corporate Responsibility. In the corporate world, I really don’t know who could lay greater claim to pioneering than Laureus, who launched in 2000 with a uniquely clear proposition to link sport and CR. And only in the last five years have sport and CSR begun to become mainstream, with ‘grassroots’ sponsorship components now (thankfully) almost mandatory.

But whilst the proponents of community sport have long understood the additional reach and relevance offered by grassroots engagement, corporate reaction to community or CR-led activity is far from consistent. Some businesses, such as Puma or Timberland, manage to leverage corporate values effortlessly into consumer-facing activity. Other brands, most brands actually – struggle

Over the last three months, Redmandarin has been conducting research into the relationship between CR and marketing. We have interviewed over 50 directors or heads of CR and sustainability for, generally, global businesses and we’re just embarking on quant, online.
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Winning attitude

SportBusiness May 2011

The BOA began this Olympic cycle boldly with the appointment of Sir Clive Woodward, someone who genuinely understands how to build a culture of success. His BOA Coaching Support Programme defined the three criteria, beyond talent, of a winning profile: teachability – are you genuinely prepared to learn and apply that learning? pressure – how do you respond? and attitude – are you attitudinally a winner?

Sir Clive’s programme was put on ice in December, after review by Deloitte: programme costs were higher than the BOA could afford and not justifiable against impact on 2012 performance. But let’s not kid ourselves Sir Clive’s programme costs mushroomed unexpectedly. Money has always been tight. Did the BOA Board sanction a programme of this kind without forecasting the impact on resource? Or authorise the expenditure without knowing whether this was sustainable? Or was it gambling on the combination of London 2012 and Sir Clive to pull in sponsors?
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In Praise of Hospitality

SportBusiness April 2011

Despite the best efforts of the EU and the procurement profession to objectify tendering processes, much of business will remain driven by relationship. We’re all prepared finally to acknowledge that consumer purchase is driven by emotional, not rational processes, but there’s a prevailing fiction that business behaves differently.

Of course, benchmarking and transparency all support the purpose of comparison, and some tendering processes acknowledge the importance of chemistry, but human nature has an insuppressible tendency to subvert automated systems which dehumanize, and remove the human dimension. And commercial relationships are more likely to survive the inevitable stresses of business life when they are founded in emotion.
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