MARKETING, BUSINESS DEVELOPMENT Agenda Item 5.3 AND MAJOR EVENTS COMMITTEE REPORT COVER SHEET
22 April 2004 2005/2006 VOLVO OCEAN RACE
Division Marketing & Corporate Affairs
Presenter Mary Hennessy, Manager Melbourne Marketing & Major Events
Purpose
To provide information on the 2005/2006 Volvo Ocean Race, and propose Council’s level of sponsorship support for the event.
Time Frame
Held every four years, the ninth Volvo Ocean Race is scheduled to start in the Mediterranean in November 2005 and will take six months to complete. The Race will stop in 10 designated ports, known as ‘official stopovers’. The Ocean Race Fleet will be in Melbourne for at least three weeks from 20 January – 11 February 2006.
Finance
The total cost of the sponsorship proposed is $250,000. This arrangement would be a split with $200,000 in cash and $50,000 in-kind marketing support. A bid for funding in the 2005/2006 financial year will be made through the Council’s budget process. It is important to note that the City of Melbourne will have fulfilled its financial obligations to the Deaflympic Games in the previous financial year (total contribution was $200,000 over two years).
Legal
No direct legal issues arise from the recommendation in the report. Legal advice will be provided as required in the development of any sponsorship agreement.
Sustainability
Connected and Accessible City
The event will profile Melbourne’s Docklands, promoting sea transport connections between local, national and international locations. The use of public transport will be promoted to competitors, support staff and spectators wherever possible.
Inclusive and Engaging City
City of Melbourne will coordinate business, investment and tourism activities to ensure that Melbourne gains the maximum exposure and benefit from this event. The City of Melbourne proposes to conduct an extensive program of social and cultural activities around the event that will embrace Melbourne’s multicultural heritage and attract people to the Docklands area.
Over the three weeks there will be a free public festival of activity surrounding the Volvo Ocean Race that will include: · International Food Festival; · Multicultural Music Concerts; · Fashion Parades and Displays; · Mini Film Festival at Waterfront City; · Satellite activities on the water such as ‘Sailability’; · In-port racing by the Volvo Ocean Race participants; · Retail, dining and nightlife promotions within the City; · Tours of key City attractions; and · Satellite activities promoting the Commonwealth Games.
Melbourne is in the midst of a major waterfront development. These significant works have begun the process of realising the tremendous value the waterways and related assets can bring the City of Melbourne. The Volvo Ocean Race presents an ideal catalyst to drive local, interstate and international focus on the world class development being built at the Docklands, and comes at a crucial time in its twenty-year development.
Innovative and Vital Business City
The Race will arrive in Melbourne two months prior to the 2006 Commonwealth Games. The Race will draw worldwide attention to Melbourne in the lead up to the Games through extensive media coverage. The Race will quite importantly boost the economic impact to Melbourne around the time of the Commonwealth Games.
The economic benefit to the State of Victoria is estimated at $26 million. Visitation generated by crews and sponsors, and significant expenditure by race teams and interstate and international visitors will contribute to this spend.
Environmentally Responsible City
It is understood that that there will be minimal environmental impact as a result of the Race. The Port Coordinators will be required to adhere to relevant environmental guidelines and policies as set out by the Race Coordinators and the City of Melbourne.
Recommendation
That the Marketing, Business Development and Major Events Committee note:
· the information provided on the 2005/2006 Volvo Ocean Race; and
· the level of Council support for 2005/2006 Volvo Ocean Race is subject to funding as part of the 2005/2006 budget process, and will be no more than $250,000 of which $50,000 is in-kind marketing support. Attachment: 1. Sustainability Assessment 2 MARKETING, BUSINESS DEVELOPMENT Agenda Item 5.3 AND MAJOR EVENTS COMMITTEE REPORT
22 April 2004 2005/2006 VOLVO OCEAN RACE
Division Marketing & Corporate Affairs
Presenter Mary Hennessy, Manager Melbourne Marketing & Major Events
Purpose
1. To provide information on the 2005/2006 Volvo Ocean Race and propose Council’s level of sponsorship support for the event.
Background
2. The Volvo Ocean Race is the world’s premier around the world ocean race. Owned and managed by Volvo Event Management (VEM), the Race attracts 10-12 teams of professional sailors.
3. Held every four years, the ninth Race is scheduled to start in the Mediterranean in September 2005, and stops for three weeks in designated ports, known as ‘official stopovers’. These official stopovers allow for yacht repairs, recovery by the crew and promotion of the event.
4. The official stopovers for the 2005/2006 Race will be: 4.1. Vigo, Spain; 4.2. Capetown, South Africa; 4.3. Melbourne, Australia ; 4.4. New Zealand (port tbc); 4.5. Rio, Brazil; 4.6. Baltimore, USA; 4.7. New York, USA; 4.8. Southampton, England; 4.9. Gothenburg, Sweden; and 4.10. Baltic finish port.
5. The three week stopovers generate major economic impact for the host city. Operational staff and sponsors join the Race and spectators celebrate one of the world’s toughest sporting challenges, witness the incredible state of the art yachts first hand, and enjoy the atmosphere of the Race Village.
6. The event is expected to attract 5,000 interstate and 1,000 international visitors, as well as 500 race crew, media and 1000 sponsor representatives.
4
7. The Race Organisers have introduced ‘in port’ racing. The new race rules outline that these in port races will count towards the overall race results. These races will ensure that whilst the vessels are in Melbourne, spectators and media will be able to better view these Formula 1 yachts and elite crews in full action.
8. Teams spend US$12-14 million each on the Race and visitors to Melbourne for the event are expected to have a high disposable income.
9. The economic benefit to the State of Victoria resulting from hosting the stopover is estimated at $26 million.
10. In 2001/2002 the Volvo Ocean race achieved major international media coverage, summarised as follows:
10.1. television – In excess of 811 million viewers over 92 million hours;
10.2. internet – 6 million hits per day on the race website;
10.3. press – 1,731 publications/cum. Circ’s 230 million/640 readers; and
10.4. key markets – Europe (Germany, Sweden, UK) and the United States.
11. As the pinnacle of the sport, the Race will draw significant interest from the public and the boating fraternity. A stopover is a natural progression to capitalise on Sail Melbourne and the 99 Worlds – the largest participation sailing event ever.
12. It is an opportunity for the International Relations Department to build on the foundations they have laid through our involvement with the Melbourne/Osaka Yacht Race. The legacy of the Volvo Ocean Race will be improved facilities and infrastructure at the Docklands which will benefit this event. The last Melbourne/Osaka Yacht Race took place in March 2003 and the next event will occur in March 2007.
13. Melbourne is in the midst of a major waterfront development, which started with the development of Southbank and continues today at the Docklands. At $8 billion, Docklands is the largest development project undertaken in Victoria – an entire development designed around the water. The Race presents an ideal catalyst to drive local, interstate and international focus on this world- class development, at a critical time in its 20 year development.
14. The opportunity to have a full schedule of social and cultural activities surrounding the event will be a priority to seize the opportunity to showcase Melbourne and its waterways to local, interstate and international markets.
15. Premier Bracks announced that Melbourne had won the rights to host the stopover on 17 July 2003. The State Government have committed a significant amount of funding to the event.
16. The State Government are currently in the process of establishing a Board who will govern the event.
Issues
17. The event requires 12 temporary docks to be built in Docklands to accommodate the boats. The logistics and planning permits around this unique requirement will need to be managed accordingly.
18. Public access to the Docklands will need to be promoted to maximise visitation to the event.
5
Relation to Council Policy
19. The Volvo Ocean Race links with a number of strategies outlined in City Plan:
Strategic Direction 1.3 Build relationships at the local to international level that consolidate Melbourne’s capital city role and promote social equity, environmental quality and economic prosperity:
“Strengthen and develop long term strategic partnerships with Sister Cities, Business City Network cities and other key partners”.
Strategic Direction 2.1 Grow Melbourne’s competencies as a globally-recognised, entrepreneurial and competitive ‘knowledge city’:
“Enhance and promote the City’s liveability and lifestyle options, including its affordable, high quality housing and educational centres and its rich and diverse culture, as some of the particular benefits of conducting business in the City.”
Strategic Direction 3.3 Promote, celebrate and further develop the City of Melbourne as a ‘city for the arts’ and as a sporting capital with a rich and vibrant cultural life:
“Promote and further develop Melbourne’s renowned capabilities as the sporting capital of Australia”.
Strategic Direction 3.9 Attract, facilitate and maximise the benefits of major City events and festivals.
“Position Melbourne nationally and globally as the events and festivals capital of Australia by providing and supporting a diverse range of quality events year round.”
“Enhance the quality and variety of sporting, recreational and entertainment events hosted in the City.”
“Increase City visitation and improve public perception and enjoyment of the City through events and festivals.”
“Facilitate the provision of event facilities and encourage the staging of major city events and festivals in a range of public spaces throughout the City”.
20. The Volvo Ocean Race links with a number of strategies outlined in the National and International Sports Marketing Policy:
Strategy 5.1.2 One off Sporting Events To attract, promote and leverage one off major sporting events to ensure optimum return for other sectors (retail, hotel, dining) and to improve and market Melbourne’s national and international position as a renowned global sporting capital.
“Help attract and facilitate one-off major sporting events by providing sponsorship and logistical support.”
“Actively promote one-off major sporting events via City Marketing campaigns.”
6
“Maximise city benefit by providing a link to one-off major sporting events and other sectors (retial, hotel, dining).”
“Utilise one-off major sporting events to ensure the Melbourne brand reaches national and international audiences.”
“Lend support to one-off major sporting event stakeholders through involvement in event marketing/promotions committees.”
Consultation
21. All branches within Council who are affected by the event have been consulted (in particular International Relations) and will be included in meetings and planning in the lead up to the event.
Government Relations
22. The State Government have consulted the City of Melbourne and will be providing regular updates until the Board is established. City of Melbourne will then sit on a number of relevant committees concurrently with the State Government and other relevant stakeholders.
Recommendation
23. That the Marketing, Business Development and Major Events Committee note:
23.1. the information provided on the 2005/2006 Volvo Ocean Race; and
23.2. the level of Council support for 2005/2006 Volvo Ocean Race is subject to funding as part of the 2005/2006 budget process, and will be no more than $250,000 of which $50,000 is in-kind marketing support.
7 Attachment 1 Agenda Item 5.3 Marketing, Business Development and Major Events Committee 22 April 2004
Sustainability Assessment 2005/06 Volvo Ocean Race
Theme: Organisational issues
Question 1: Internal Issues Is this issue an internal administrative issue? If so, how does improve organisational processes? Note: if this issue does not directly impact the municipality, please select 'not applicable' from the Impact list for the remainder of the questions.
Theme: Social Factors
Question 2: Community Services What effect will the proposal have on the quality, quantity and accessibility of education, leisure, cultural, health and other community services?
Impact: positive Likelihood: medium Magnitude: moderate
There will be an on-water activity called ‘Sailability'. This activity is designed to bring the joys of sailing to the disabled. Access Dinghies are specially designed craft built in Melbourne that cannot tip over and can be sailed by anyone, including the chronically disabled. We have helped establish a thriving Sailability program in Osaka and are working to do the same in Thessaloniki.
Question 3: Active and Engaged Community What effect will this proposal have on the development of a culturally diverse, healthy, equitable, active and involved community in Melbourne?
Impact: positive Likelihood: high Magnitude: maximum
Comments: There will be a significant amount of on and off water activities surrounding the events. The ‘off water' events will include a multicultural social and cultural program to engage the community. The ‘on water' events will encourage the community to participate in activities that will have associated health benefits.
Question 4: Cultural and Heritage Value of Built Form What effect will this proposal have on the cultural heritage of Melbourne's neighbourhoods and buildings?
Impact: positive Likelihood: high Magnitude: maximum
Comments: Waterfront City, a new development at the Docklands, has been signed on as a major sponsor. This will ensure that this area has the physical character suitable to host a major international event. It will also showcase Melbourne's waterways to the world.
Question 5: Transport and Accessibility What effect will the proposal have on the level of public transport and number of transport options/connections with the City of Melbourne?
Impact: positive Likelihood: medium Magnitude: moderate
1
Comments: The perception of public access to the Docklands has previously been poor. This event will provide an opportunity to promote access and connections to the area.
Question 6: Welcoming and Safe Public Space What effect will the proposal have on the safety and amenity of the public environment eg streets, laneways, parks and gardens?
Impact: no impact
Theme: Environmental Factors
Question 7: Energy Use and Greenhouse Emissions What effect will the proposal have on energy consumption and greenhouse gas emissions associated with Council and/or community activities?
Impact: no impact
Question 8: Resource Use and Waste Generation What effect will the proposal have on the total quantity and type of waste, including prescribed waste, generated by Council and/or community activities?
Impact: no impact
Question 9: Pollution What effects will the proposal have on the use of hazardous materials and levels of pollution (air, noise, soil, and water) in the region?
Impact: no impact
Question 10: Water Consumption What effect will the proposal have on the quantity of water consumed and disposed of by the Council and/or in the municipality?
Impact: no impact
Question 11: Flora and Fauna What effect will this proposal have on flora and fauna in the City of Melbourne on private and public land and in the aquatic environment?
Impact: no impact
Theme: Economic Factors
Question 12: Development of Key Business Sectors What effect will the proposal have on the number and type of businesses and level of business investment in the City of Melbourne?
Impact: positive Likelihood: medium Magnitude: moderate
Comments: It requires an investment of approximately US$12-14 million to enter a team in the Race. A number of business opportunities will be identified in consultation with the City of Melbourne's International Relations Department, with the aim of encouraging investment in Melbourne by crews, sponsors etc.
2
Question 13: Transport Infrastructure What effect will the proposal have on Melbourne's transport infrastructure?
Impact: positive Likelihood: low Magnitude: minimum
Question 14: Communications Infrastructure What effect will the proposal have on Melbourne's information technology and telecommunications infrastructure?
Impact: positive Likelihood: high Magnitude: minimum
Question 15: Business Innovation What effect will the proposal have on research and development in Melbourne?
Impact: positive Likelihood: medium Magnitude: minimum
Question 16: Job Creation What effect will the proposal have on the number and types of jobs available in the City of Melbourne?
Impact: no impact
3 Agenda Item 5.3 Marketing, Business Development and Major Events Committee 22 April 2004
FINANCE ATTACHMENT
2005/2006 VOLVO OCEAN RACE
The total cost of the sponsorship proposed is $250,000. This arrangement would be a split with $200,000 in cash and $50,000 in-kind marketing support.
Funding will be subject to the 2005/2006 budget process.
Kerrie Jordan Acting Manager Financial Services Agenda Item 5.3 Marketing, Business Development and Major Events Committee 22 April 2004
LEGAL ATTACHMENT
2005/2006 VOLVO OCEAN RACE
No direct legal issues arise from the recommendation in the report. Legal advice will be provided as required in the development of any sponsorship agreement.
Kim Wood Acting Manager Governance Services