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Football Sponsorship & Commerce FOOTBALL SPONSORSHIP & COMMERCE An Analysis of Sponsorship and Commercial Opportunities in Football Louella Miles Simon Rines A management report published and distributed by IMR Suite 7, 33 Chapel Street, Buckfastleigh TQ11 0AB Tel: +44 (0) 1364 642 224 www.imrsponsorship.com email: [email protected] Copyright © 2004 International Marketing Reports Ltd All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, photocopying or otherwise, without the prior permission of the publisher and copyright owner. While every effort has been made to ensure the accuracy of the information, advice and comment in this publication, the publisher cannot accept responsibility for any errors. The views expressed in this report are not necessarily those of the publisher. i Authors Louella Miles is a business journalist who has specialised in sponsorship for the past 20 years. Former managing editor of Marketing magazine, she is author of Perfect Marketing (Random House), Successful Sport Sponsorship: Lessons from Football (International Forum of Sponsorship) and What Price Corporate Reputation? (Management Today). Simon Rines is author of the best-selling European sponsorship report Driving Business Through Sport. Following a career in the marketing communications industry and ten years as a marketing journalist, he is now publisher of International Marketing Reports. Contributing author: Dan Micciche MBA (Football Industries) The authors would like to thank the following for their help in the compilation of this report: Adrian Hitchen, SponsorMetrix Alex Tielbeke Andrew Cullen, Norwich City Football Club BMRB Carlotta Calleri Zavanelli, 02 Chris Bates, TRBI Dan Jones, Deloitte & Touche David Berger, Yahoo! Dr Bill Gerrard, Leeds University Business School Ed Coan, Watford Football Club Gareth Roberts, Carlsberg Greville Waterman, The Sponsorship Consultancy Ian Riddoch, Aberdeen Football Club Michael Jackson Michael Saxton, Grappa PR Mike Lafkin, Sportcal Miriam Müller, St Pauli Football Club Nigel Empson, FMM International Peter Draper, Manchester United FC Peter Gandolfi, Nationwide Building Society Peter Jones, Plymouth Argyle FC Peter Miller, International Marketing Rights Phil Carling, Octagon Csi Rachael Church, Ark Sports Richard Arnold, Drivers Jonas Sport+Markt SportFive Starcom MediaVest Group Steve Sutherland, Charlton Athletic Football Club Steve Waggott, Charlton Athletic Football Club Tim Brill, Avaya IFM International Cover image courtesy Action Images (www.actionimages.com) ii FOOTBALL SPONSORSHIP & COMMERCE Table of contents Table of contents EXECUTIVE SUMMARY 3 SECTION I: MARKET ANALYSIS 5 CHAPTER 1: WHY DO SPONSORS GET INVOLVED? 5 Universal objectives 6 Commercial history 6 Think global, play local 7 Longevity 8 Star qualities 8 CHAPTER 2: WHAT’S HAPPENING IN EUROPE 9 Introduction 9 Italy 9 Spain 10 England 12 Germany 13 France 14 CHAPTER 3: SHIRT AND KIT SPONSORS, PROFITABILITY AND TV INCOME 17 Television and turnover 22 Which is the world’s richest club? 23 CHAPTER 4: INTERNATIONAL RIGHTS AND TOURNAMENTS 26 Introduction 26 FIFA World Cup 26 Coverage 26 Sponsorship 26 European Championships 28 Coverage 28 Sponsorship 28 UEFA Champions League 30 Coverage 30 Sponsorship 31 CHAPTER 5: THE VALUE OF TOURNAMENTS TO SPONSORS 33 Broadcasting 33 Sponsorship 33 Endorsements 34 Ambush marketing 34 Conclusion 34 iv FOOTBALL SPONSORSHIP & COMMERCE Table of contents Case study: Hyundai 35 Objectives 35 World Cup 2002 35 Euro 2004 and World Cup 2006 35 Results 36 Case study: Yahoo! 36 Objectives 36 Implementation 36 Conclusion 37 CHAPTER 6: THE COST OF COMPETING IN EUROPE 38 Background 38 Financial investment 38 What does it take? 40 CHAPTER 7: CHAMPIONS LEAGUE REVENUE GROWTH 43 Payment splits 43 Impact on TV rights fees 43 Television coverage 44 Attendances 44 Conclusion 44 Federation sponsors 48 CHAPTER 8: THE MEDIA SCENE 49 Italy 50 France 50 England 50 Germany 50 Spain 50 The Netherlands 50 Switzerland 51 CHAPTER 9: BRANDING ISSUES 52 The essence of an identity 52 Brand creation 53 The golden rules of branding 54 Economic perspective 55 CHAPTER 10: PORTRAIT OF A FAN 56 Football trumps other sports 56 Club popularity 56 Media habits 65 Reactions to sponsorship 65 Categories of interest 65 Fans’ attitudes survey 65 Survey conclusion 71 Fans in the Far East 71 FOOTBALL SPONSORSHIP & COMMERCE v Table of contents Latin America 76 Marketing and the elusive fan 79 CHAPTER 11: INDIVIDUAL RIGHTS 80 Registration of a trademark 80 Passing off 80 David Beckham 81 Team versus individual 81 Control of image rights 81 Impact of adverse publicity 81 Case study: Has adverse publicity affected Beckham’s sponsorship potential? 82 CHAPTER 12: OUTSOURCING 90 Outsourcing and SportFive 90 Hertha BSC 90 Hamburger SV 90 SportFive portfolio 90 The outsourcing relationship 90 Regional variations 91 Tickets and ticketing 91 CHAPTER 13: OVERSEAS MARKETING STRATEGIES FOR CLUBS 92 Background 92 Planning 92 Strategy 93 Market knowledge 93 Real Madrid’s Chinese experience 94 Successful tactics 94 Keijan’s sponsorship of Everton 95 Future prospects in China 95 REFERENCES 96 vi FOOTBALL SPONSORSHIP & COMMERCE Table of contents SECTION II: BUSINESS OPPORTUNITIES 97 CHAPTER 14: MARKETING A CLUB’S WARES 97 Case study: NEC Nijmegen 97 Background 97 Business strategy 98 Marketing for potential sponsors 98 How to work with sponsors 99 Balancing costs 99 Unique selling points 99 Achievements 99 Conclusion 100 Case study: Charlton Athletic 100 Background 100 Sponsorship marketing 100 Objectives 100 The sell 102 Conclusion 103 CHAPTER 15: HOW STADIA CAN BE EXPLOITED 103 Naming rights 103 Rethinking stadium usage 105 Case study: Juventus 105 Stadium project 106 Young World Project 106 Conclusion 106 Arsenal-Emirates naming rights deal 106 Benefits of new stadia 107 Points for the future 107 Stadium costs 108 Multi-faceted venues 108 Stadium pariahs 109 Revenue boosters 109 Stadium capacity 109 Revamp or new-build? 110 Future trends 110 Conference facilities 110 Case study: Leicester City Walkers Stadium 113 Background 113 Finance 114 Why build? 114 Conference facilities 114 Marketing 117 Occupancy 117 Conclusion 117 FOOTBALL SPONSORSHIP & COMMERCE vii Table of contents CHAPTER 16: FOOTBALL AND ONLINE 118 E-commerce 118 Licensing and syndication 119 Advertising and sponsorship 119 Betting 119 Case study: Premium TV 120 PTV expertise 120 Football club joint ventures 121 E-commerce 121 Facts and figures 122 Future prospects 122 CHAPTER 17: MATCHDAY OPPORTUNITIES 123 Case study: St Pauli 123 Background 123 Objectives 124 Marketing offer 124 Implementation 124 Conclusion 125 CHAPTER 18: LEVERAGING BRANDS 127 Case study: Olympiakos CFP 127 Background 127 Marketing background 127 Licensing 128 Conclusion 130 CHAPTER 19: COMMUNITY SPONSORSHIPS 131 Case study: Watford Football Club 131 Background 131 Objectives 132 Strategy 132 Implementation 132 Corporate benefits 134 Conclusion 134 Case study: London Leisure College 134 Background 134 Educational offers 135 LCC philosophy 135 The vision 136 The academy 136 Club impact 136 Conclusion 137 Case study: Avon Insurance 139 Background 139 Sponsorship objectives 140 Contractual terms 140 viii FOOTBALL SPONSORSHIP & COMMERCE Table of contents Budgets 140 Programme execution 140 Conclusion 141 Sources of funding 143 CHAPTER 20: SECONDARY SPONSORSHIPS 146 Case study: Northampton Town 146 Background 146 Objectives 147 Strategy 147 Implementation 147 Sponsorship gains 161 Conclusion 164 Case study: Norwich City 164 Background 164 Commercial objectives 164 Implementation 165 Results 165 Broader commercial offerings 166 CHAPTER 21: FOOTBALL AND FINANCE 167 Traditional football business model 167 The nature of a fan 167 Performance impact on revenue 168 Future prospects for the football business 168 Case study: Aberdeen 169 Background 169 Financial objectives 169 Commercial objectives 170 Marketing tactics 170 New membership drive 170 New revenue streams 171 Conclusion 171 CHAPTER 22: TECHNOLOGY PARTNERS 172 Case study: Arsenal and 02 172 Objectives 172 Strategy 172 The competition 173 Target audiences 173 Further plans 174 Implementation 174 Benefits 174 Support 174 The future 174 FOOTBALL SPONSORSHIP & COMMERCE ix Table of contents CHAPTER 23: DATABASE MARKETING 175 Direct marketing 175 Data recording 175 Case study: Plymouth Argyle 177 Executive summary 177 Background 177 Five-year plan 177 Implementation 178 Draft strategic plan for discussion 178 Supporter satisfaction survey 178 Method 181 Analysis 181 Summary of recommendations for action 190 Season ticket initiatives 191 Contact and direct marketing 191 Building a base for the future 192 Impact of success 193 Marketing moves 193 Going up 194 Pre-season activity 195 The future 195 Results 195 Conclusion 196 CHAPTER 24: VIRTUAL/PERIMETER ADVERTISING 196 LED perimeter advertising 197 Virtual advertising 197 FIFA regulations for the use of virtual advertising 198 CHAPTER 25: THE ROLE OF RESEARCH 200 Pre-sponsorship research 200 Essential information for sponsors 200 Measurement methods 200 Communications research 201 Research effectiveness 201 Modus operandi 201 Football specific research 202 Sponsorship’s benefits 202 CHAPTER 26: LEGAL ISSUES 203 Collective selling of broadcasting rights 203 Licensing of media coverage by clubs 203 Salary caps 204 Player transfers 204 New transfer rules 205 Player image rights 205 Legal issues for French clubs 206 x FOOTBALL SPONSORSHIP & COMMERCE Table of
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