Hollis Sponsorship Bulletin

The stand-off over the Team 2012 sponsorship package continues to cast a shadow over elite athlete funding for the London Olympic Games.

Team 2012 was created by the government to help cover a hefty shortfall in public funding for prospective UK Olympians. In essence, companies which sign up to it will be granted access to talent as part of their marketing and promotional activities. However the programme has run into problems because of a potential clash with top athletes’ personal endorsements.

Leading athletes are concerned about a clause in the Team 2012 contract which bars them from entering any new arrangement which “derogates from and/or conflicts with the Team 2012 agreement”. In other words, athletes who are part of the UK Sport-administered programme appear to limit their own earning potential. As a result, leading names such as swimming sensation Rebecca Adlington and cycling champs Chris Hoy and Bradley Wiggins have refused to sign.

The government however is starting to pile on the pressure – suggesting that top athletes should see Team 2012 as pay back for all the years of public support they have drawn on during their developmental years. There’s also a suggestion that, by refusing to sign, top stars with serious earning potential are driving a wedge between themselves and lesser known athletes who can’t command big commercial fees. For the latter, Team 2012 is being promoted as a lifeline.

Premiership side Liverpool FC’s negotiations with shirt sponsor Carlsberg seem to be drawing to a close – though it is still not clear if the Danish brewer will choose to renew its deal.

As with other top-tier shirt sponsorships deals which have been concluded recently, the key issue seems to be one of price. Currently, Carlsberg pay around £7.5 million a year – but Liverpool is believed to want double that.

It’s highly unlikely Carlsberg will pay anything like that amount – so Liverpool will either have to accept a lower sum or watch Carlsberg walk away. If the latter occurs, it may not be too catastrophic for the Merseyside club. Media reports this week suggest that Standard Chartered Bank is pondering a £15 million a year deal.

After a lengthy search for a sponsor, Epsom Downs’ blue riband Derby Festival has finally secured a five-year deal with specialist bank Investec. Starting this year, the company will take over from 14-year incumbent Vodafone.

The new sponsorship is a major boost for Epsom – which has just completed a £38m redevelopment at its course. Commenting on the deal, Epsom Downs racecourse MD Nick Blofeld said: “We are very excited. These days (sponsorship) is much more about strategic partnerships and there are many ways Investec and Epsom Downs can work together to keep the Derby Festival a hugely successful event but also bring creativity and reach new audiences.”

Investec is not new to sponsorship. It already sponsors England’s autumn rugby internationals at Twickenham and recently signed up for the Tri Nations in New Zealand. Commenting on the deal, Investec’s UK CEO, Bradley Fried said, “We are delighted to be joining Epsom and the Derby Festival at the beginning of a new era and know that together we will be able to make a great event even better. The Derby makes sense for us in a number of levels; it has excellent television coverage which adds a new dimension to our brand footprint and the heritage has some quirky elements that suits our positioning of Out of the Ordinary.”

This year’s Derby Festival is on 5-6 June. Aside from the Derby, there will also be a return to 14 race days for 2009.

The International Rugby Board has unveiled electronics  giant Toshiba as title sponsor of its 2009 Junior World Championship 2009 in Japan. The company, which is a big backer of rugby union in Japan, will have naming rights for the 2009 tournament which takes place from June 5-21.

“The International Rugby Board is delighted to welcome Toshiba as title sponsor of the IRB Toshiba Junior World Championship,” said IRB chairman Bernard Lapasset as he announced the deal. “The appointment of one of the world’s biggest electronic brands highlights the enormous commercial appeal and prestige of the Championship.”

The three-week Championship will bring together 400 players from 16 nations. Noboru Mashimo, chairman and VP of the Japan Rugby Football Union said: “Toshiba has been a champion of Rugby in Japan for a long time and we are delighted that it is committed to what will be the largest international Rugby tournament ever to be staged in Japan.”

Tough times demand innovative measures. So it will be interesting to see how Westcountry football club Bristol Rovers fare in their search for a new shirt sponsor.

The club needs a new sponsor after previous partner Cowlin Construction decided to end its 11-year support for the club. But having failed to secure a commitment from anyone, it has decided to hold a prize draw instead.

Under the scheme, 100 tickets will be sold for £1000 each to local businesses. First prize is to get the corporate name on the home shirt while second prize is the away shirt. A third prize will see one company get £2500 worth of perimeter ads. As an incentive for entering the draw, companies will also get a hospitality package worth £700 and the chance to have their photo taken with the first-team.

Speaking to the local press, Rovers commercial director Barry Bradshaw said: “Obviously money is tight at the moment, so we decided to be creative and try something a bit different. We have always known that there are lots of local businesses who would love to come on board but have been put off by the high prices of shirt sponsorship. Even if they don’t win one of the three main prizes, they still get the chance to experience a great day out at the stadium.”

The plan has much to recommend it – not least the PR. But there are a few obvious drawbacks. The first is that the club may not sell enough tickets – in which case it will have to decide whether to accept less than the £100,000 it wants. Secondly, it may end up with a sponsor that has no money to spend on activation – limiting the impact of the partnership. Thirdly, it may be saddled with a brand or board that is incompatible with the club’s image or values.

Still, best of luck to them! The closing date for entries is 1800 on May 27. Information from Ian Holtby on 0117 952 4049 or by email via ianholtby@bristolrovers.co.uk

In the latest indicator that sponsorship is set to experience a tough run into 2010, there are reports from the US that brewing giant Anheuser-Busch InBev is planning to cut its Olympics-related marketing spending by up to 50%.

Although the company – which owns brands such as Budweiser – continues to be a major sports sponsor,  it is under pressure to cut costs by around $2 billion. With existing commitments to the FIFA World Cup and various US sports properties, it seems inevitable that its Olympics activation spend will have to share some of the pain.

Prior to the planned cuts, A-B spent between U$350-$400 million a year on sports sponsorships. Responding to questions about its Olympics investment – which is centred on the US Olympics team – A-B President Dave Peacock said: “For competitive reasons, we won’t comment on the details of these discussions. We are in negotiations, with no final decision made at this time. Anheuser-Busch continues to invest in sports sponsorships, which includes a four-year renewal of the US Olympic Committee and teams to 2012.”

One money-saving option is to drop exclusive arrangements – which attract a premium price. There has been talk, for example, that A-B rival Miller may be able to buy advertising airtime on NBC Universal TV networks during Vancouver 2010 and London 2012. Usually A-B negotiates category exclusivity to prevent rival brands doing so.

When times are good, sponsors come flocking to big sports properties such as Premier League soccer clubs. But in recession, it’s up to clubs to go searching for partners. As such, a new mindset is required – one which demands that rights holders have a clear grasp of client objectives. So it is interesting to note that delegates from Tottenham Hotspur are pulling out all the stops to try and secure a major partner from the oil rich Middle Eastern Gulf States.

Tottenham needs a big commitment – because it wants to build a state-of-the-art 58,000 stadium and retail complex to replace its existing home White Hart Lane. Like North London neighbours Arsenal, Tottenham would ideally like a long-term naming rights and shirt deal – because this money could offset the upfront cost of the stadium. But there aren’t many companies that can afford such a deal.

This is why it has targeted the Gulf – where Qatar, Bahrain, Dubai and Abu Dhabi business interests still seem willing to invest in the right sports property. Led by executive director Paul Barber, the club has been talking to decision-makers across the region, armed with Arabic-language business cards and brochures to present its business case.

Barber is keen to raise funds – but also recognises the importance of not appearing want to come across as pushy or naive. Speaking to Emirates Business on a recent fact-finding tour, he said: “We are very conscious of not walking into a country and expecting people to roll over and write big cheques because we are a Premier League club. We are realistic and know that’s not how business is done here.”

So why should anyone be interested? Well according to Barber, the new-build at Spurs will be the only stadium naming rights deal to come up in London during the next decade – which makes it a unique opportunity. For a Middle Eastern brand seeking to build a global presence, he argues that there is no more cost-effective way of reaching an international audience. “They could either spend £300-£400m on TV advertising around the world,” he told Emirates Business, “or become involved in the Premier League and get their share of 90,000 hours of TV a year.”

As an iconic soccer brand, Tottenham is well-placed to clinch a deal – but there are a couple of reasons why it is unlikely to match the money made by Arsenal. Firstly, the downturn will have an inevitable impact on prices. With a new sponsor needed before the start of next season, the club doesn’t have the luxury of waiting for economic recovery. Secondly, Tottenham has so far failed to qualify for the Champion’s League. In this respect, it is a decade behind Arsenal in terms of global brand-building. This will surely play a part in the value a new sponsor places on the club.

The Co-operative Group is to sponsor this year’s World Netball Series in Manchester. The event, which takes place in October, will see England, Australia, New Zealand, Jamaica, Samoa and Malawi (the world’s top six) compete.

The deal extends the Co-op’s involvement with netball. The company is already a sponsor of the UK’s Netball Superleague and Back The Bid, a campaign to see netball secure inclusion in the 2016 Summer Olympics. “We are delighted to be involved with the World Netball series, especially in our home town of Manchester,” said Co-operative sponsorship manager Liz Matkin: “The Co-operative has been heavily involved in netball so this sponsorship is complementary to our existing portfolio.”

The decision to get behind netball is extremely shrewd because it has allowed the Co-operative to benefit from the halo effect of London 2012 – without having to pay premium prices for an official sponsorship. Not only that, the fact that netball is so strong at school and community level means senior politicians are crawling all over the Co-op’s Back The Bid campaign. PM Gordon Brown and Olympic Minister Tessa Jowell, sensing a potential vote-winner, have both lent their support to the 2016 lobby. 

One upshot of the recession is that Indian and Middle Eastern companies are being linked to just about every available sponsorship property. For weeks, there has been speculation that Manchester United would replace AIG with an Indian conglomerate like Sahara. Now, there are rumours that Tottenham Hotspur will replace its current short sponsor Mansion with a UAE-based partner when the online betting firm’s four-year deal expires this summer.

Perhaps even more interesting are rumours that Liverpool is  talking to India’s GMR Group about a possible takeover. GMR – a diversified conglomerate which is run by billionaire Grandhi Mallikarjuna Rao – initially started conversations about a sponsorship deal. But this is believed to have led to a more broad-based discussion about investment in the club. GMR, which already backs Indian Premier League cricket team Delhi Daredevils, would have to pay around £500 million to take control of the Merseyside club. But it would then be in a position to use the club as a platform for various marketing initiatives.  

After Brawn GP and Jensen Button’s stunning start to the new Formula One season, there are reports that Virgin chief Richard Branson may up his commitment to the team.

Virgin started sponsoring the team just prior to the start of the new season and has already achieved great marketing capital from its partnership. But with Jensen Button now leading the Driver’s Championship table, there’s a feeling that the Brawn brand can become even more impactful – either for Virgin or for another sponsoring company. Brawn, for its part, is hoping to lock in a long-term deal at a time when there is so much buzz around its brand.

Branson has said that Virgin’s negotiations with Brawn are ongoing – but that they could go in one of two directions. Either Virgin could secure itself a long-term title sponsorship of the team – or another company could step in with a financial offer which Brawn finds difficult to resist. If that happened, Virgin would remain as a sponsor for this F1 season but then “bow out gracefully” before 2010.

In a separate development, Philips is backing a second series of its ad-funded show The Factory on Pan-European sports channel Eurosport. The show, which is designed to support Philips’ sponsorship of the AT&T Williams F1 team, looks at the team’s day-to-day preparations during the season. As part of the deal, viewers can enter a competition which gives them a chance to drive a Williams F1 car.