Sponsorship remains one of the world’s most important forms of mar- keting communications expenditure, and sport is still the major recipient for the money that corporations commit to sponsorship spending each year. (Chadwick, 2007: 287)
A squad to win the Rugby World Cup (and plenty of new business).
(2007 advert for Benchmark Sport Holdings, a company that controls a network of brands and businesses involved in developing revenue streams from sports entertainment events)
Introduction
Since 2000 the European market in sports sponsorship has risen by 40 per cent to be valued in 2008 as worth in the region of £5 billion (SportBusiness International, January 2008). This growth is all the more remarkable given that a European Union Directive in 2005 signalled an end to tobacco advertising and sponsorship of sport and, as we note below, the tobacco industry had been one of the key sectors driving sports sponsorship since the 1960s. However, the escalation in value of sports-related sponsorship is indicative of other trends that have been shaping media sport in the new century. One has been the expansion in sports content on television across primarily pay-TV platforms, fuelled by a more commercially orientated broadcasting industry; the other has been the continuing commercialization and commodifi ca- tion of sports content that has occurred in the last decade as the sports industry has consolidated its position by entrenching elite sport within the entertainment and corporate sectors of the economy.
At the end of the decade it is almost impossible to have a discus- sion of elite sports without someone mentioning the importance of
‘branding’, how football clubs can ‘add value’ to their brand and
‘develop and reposition’ it in ‘emerging global markets’. When the Abu Dhabi United Group, the overseas investment arm of the Abu Dhabi Royal Family, took over Premier League football club Manchester City in September 2008, the strategic aim of Sulaiman al-Fahim was not to make money out of the club, but rather to use the club’s media profi le as a space to promote Abu Dhabi as a tourist destination. The lexicon of sports language has been transformed by the discourse of advertising and marketing.
In this chapter we attempt to make sense of the complex relation- ship which has evolved at the very centre of national and international sport – a triangular relationship between sport, sponsors and television which now increasingly drives the shape and development of sporting contests. Building on the previous chapter we focus on the historical link there has always been between sport, the media (television in particular) and sponsorship. As we point out, this relationship is not new and, as Cashmore (1996: 163) has noted, its roots date back to the initial growth of professional sport:
The development of the sports goods industry dates from the last quarter of the nineteenth century, paralleling the growth of organised sport.
However, what also becomes clear is that the last forty years or so have witnessed a tightening of the stranglehold that sponsors in conjunction with television exert on major sporting events.
Later, we examine the centrality of this sporting triangle in shaping the contemporary national and international sporting experience.
Here we look at recent events such as the 2007 Rugby World Cup fi nals to examine the extent to which funding from sponsors and television underpin their economic structure. Finally, we ask what are the tensions and contradictions inherent in such a relationship for all the parties involved. In particular, how will what Garry Whannel (1992: 151) has called the increasingly powerful ‘interlocking forces of television and sponsorship’ shape sport and its audiences in the future?
The good old days? Sport and sponsorship
A triangular relationship has developed in recent years that has come to dominate the economic structure of modern sport. Sports governing bodies, sponsors and television have become intertwined in an alliance
A sporting triangle 45 that has transformed sport in Britain and throughout the world.
Professional sport in Britain today relies on commercial sponsorship and money from the sale of television rights for its fi nancial survival.
Sponsors are keen to secure media exposure, the most desirable being television, thus sports are desperate to achieve a television space for their sport and their sponsor(s). As this pattern develops it seems that sport is increasingly becoming an adjunct of the advertising industry.
Why has this come about?
Martin Polley (1998: 63–84) convincingly argues that sporting activity has always had a contact of sorts with commercial sponsors.
Initially this took the form of aristocratic patronage. By the nineteenth century it involved members of the landowning classes becoming involved in popular recreation through forms of patronage. This was perceived as a means of promoting the social order, as well as provid- ing an opportunity to increase the standing of the landowner among the lower classes.
In Britain, the later part of that century saw a fundamental reorgani- zation of sporting activity along both professional and commercial lines, with mass spectator sport as we understand it today evolving during this period (Holt, 1989). Many of the governing bodies of sport that exist today were founded around this time. As the commercializa- tion of popular activities increased, refl ecting the commercial oppor- tunities that the new industrial urban environment offered to some, so the business opportunities offered by sport increased also.
As patronage declined due to the economic and social dislocation caused by the development of industrial capitalism, so commercial sponsorship increased. Two of the most popular spectator sports in Britain, football and cricket, enjoyed varying degrees of contact with commercial sponsors. As early as 1896, for example, Nottingham Forest were sponsored by Bovril when they appeared in that year’s FA Cup Final, while elsewhere in Europe the origins of the modern Tour de France cycle race date from a commercial sponsorship deal which used the race to promote the newspaper L’Équipe. However, this level of sponsorship involvement would seem minuscule when compared with the expansion in this area that was to occur during the 1960s.
1960s: the sponsorship game
A number of currents and cross-currents were responsible for the sudden growth in the level of sports sponsorship that was to occur from this period onwards. One major factor was the fi nancial crisis
that professional sport found itself in as a result of the falling revenue that accompanied the decline in attendances. During the early 1950s over 40 million people regularly watched professional football in Britain. By the 1960s this had declined to under 30 million and, despite a brief resurgence after the English World Cup victory in 1966, attend- ances continued to drop. This pattern was repeated in all the major spectator sports in Britain. Gate receipts provided the main source of revenue for these sports.
The shift away from spectator sport was part of a wider shift in the leisure pattern of postwar Britain. As the suburbs grew, leisure activities were becoming increasingly domestically orientated, a trend accentuated by the growth in the popularity of television. In addition, as the British economy enjoyed a period of relative buoyancy, the increase in discretionary income resulted in the development of a more aggressively commercial pattern of leisure activity. Sport suddenly found itself competing for the public’s attention in an increasingly competitive marketplace.
Allied with this was the internal structure of the sports govern- ing bodies themselves. Most of the organizations were still run along amateurish and paternalist lines and were incapable of dealing with the problems that the changing nature of leisure activity posed to their sports. Against the backdrop of these changes, it was the banning by television of cigarette advertising in 1965 that provided the incentive needed for major corporate involvement in sports sponsorship.
Many of the initial corporate sponsors of televised sport were those companies who viewed sponsorship as a way of securing tel- evision exposure, not only on commercial television, but also on the
‘advertising-free’ public-service BBC TV. During this period sport was particularly vulnerable to the overtures of the commercial sponsor. A sport’s ability to secure television coverage thus became a key factor if it wished to attract potential sponsors.
As we argue in the next chapter, television has always viewed sport as an important part of its schedules. Historically, sports programming proved to be cheap, popular and easily scheduled. The fees that sport receives from television, although initially disproportionally small, have in recent years mushroomed with increased competition in the television marketplace with the result that governing bodies of sport are keen to go to any lengths to accommodate television.
In 1966, sports sponsorship accounted for less than £1 million of the revenue received by sport in Britain. By the mid-1970s this fi gure had risen to £16 million (1976) with a further growth to £46 million
A sporting triangle 47 by 1980. By the early 1990s the amount of money generated by com- mercial sponsorship had jumped to over £250 million and by 2006 the UK market was worth over £450 million (IposMori, Sportscan, March 2007). Globally it has been estimated that expenditure on sports sponsorship grew between 1989 and 1996 from $3 to $11 billion (The Economist, 6 June 1998); by 2008 the North American market alone was worth $11.6 billion (SportBusiness International, January 2008) and the European sports sponsorship market was worth £5.26 million in 2007 (Rines, 2007).
Initially, cigarette sponsors such as Benson & Hedges (cricket and snooker) and John Player (cricket and motor racing) used sponsorship of televised sport as a means of evading the television ban on cigarette advertising and obtaining ‘piggy-back’ exposure on the advertising- free BBC television. Such was the success of these arrangements for the sponsors involved that the range of corporations involved in tel- evised sport began to grow. In addition, there were sports suppliers, the most famous being the sportswear fi rm Adidas, who began to use the television age of sport to establish a global marketing platform (Smit, 2007).
Why sponsor sport?
The reasons why companies choose to sponsor sport vary. They can be looking to achieve an increase in the public profi le of the company, as well as increasing public awareness of the product/services that the company offers. The association of the company/product in the minds of the consumer with a particular sporting image is also a factor in determining which sport companies may choose to sponsor.
During the 1970s the condom manufacturer Durex became involved in the sponsorship of motor racing as part of the company’s strategy to
‘normalize’ their product. Sports sponsorship has also proved a very cost-effective means of achieving these aims. Major corporations also use sport as a place at which clients can be entertained. The growth of corporate entertainment through the ‘tented villages’ that now accompany most major sporting events is another manifestation of the increasing links between business and sport.
By the early 1980s it became increasingly clear that sport was becoming fi rmly positioned within the broader communication strat- egies of corporations. Whitson (1998), focusing on North America, clearly demonstrates how the linkages between professional sport and the media industries had evolved in the 1980s and 1990s to such
a degree that he identifi es ‘a new kind of corporate integration in the media and entertainment industries’ (p. 59).
In 2007 the Spanish sponsorship market was worth €550 million with the Santander bank the largest domestic sponsor. In that year they got involved with Formula 1 motor racing and calculated that the promotional value of their €21 million investment was worth at least four times that (SportBusiness International, March 2008). With the bank’s international market profi le they viewed the international television coverage of the sport in Europe and South America as offer- ing a perfect fi t with their communications and corporate strategy to increase brand awareness in a competitive market.
Not only does high-profi le televised sport offer a range of market- ing, public relations and advertising opportunities which extend the range of public awareness for particular companies, but increasingly in North America this also involves media corporations not simply providing the television channels which deliver this ‘sports product’, but also owning the sports clubs involved. Thus through vertical inte- gration media corporations can control both distribution and content.
The extent to which this pattern has emerged in the UK is examined in more detail later in the chapter.
While for corporations involved in the sports/leisure industry the benefi ts for brands of a close association with a sporting elite are clear (note how both Nike and Reebok during the 1980s overtook rivals such as Adidas in market share by aggressively pursuing such a policy – see Chapter 5 for more details). At a national and international level non sports-related companies can benefi t hugely from close involve- ment with sporting teams and individuals. For example, Visa’s close involvement with the 2007 Rugby World Cup (Offi cial Worldwide Partner and Offi cial Payment Service) was part of a long-term rela- tionship they have nurtured with the sport and has been driven by the aim of building brand awareness across global markets while increas- ing point-of-sale use of their cards (Glendinning, 2007).
The sports broker
As we have seen, corporations have clearly defi ned aims in sponsor- ing sport. As capital penetration of sport has increased, there has been a corresponding growth in the consultancy agencies which link the sponsor with the sport. These agencies have become the new power brokers in the alliance between sport and commerce, helping to provide the linkage points in the television/sport/sponsorship axis.
A sporting triangle 49 Worldwide one of the largest of these agencies is International Management Group (IMG). Originally formed by Mark McCormack In 1960 his initial interest in sports management evolved around golf.
Gary Player, Arnold Palmer and Jack Nicklaus were three of his fi rst clients (see Chapter 5). Soon his organization began to diversify into other sports such as tennis, while he used his sporting and business contacts to help facilitate the development of the television arm of his empire, Trans World International (TWI).
By the time of his death in 2003 IMG was the largest independent producer of sports programming in the world. Today IMG is a global sports, entertainment and media operation. Not only does it manage top sports people, but through its subsidaries such as TWI and Tiger Aspect Productions, it produces around 11,000 hours of content a year distributed across all media platforms. However, they were by no means the only players in the game.
In the UK one of the main trailblazers in the development of sports brokers was Patrick Nally, whose WestNally pioneered the model of sports marketing which would be put to good effect in the world of both the Olympics and the FIFA World Cup by ISL (International Sport and Leisure) which exclusively marketed both events globally.
There is now a range of agencies; some, such as Ketchum Sport and Sponsorship, have diversifi ed out of PR and other areas of communi- cations services to form agencies working across marketing, PR, event promotion and sponsorship. Indeed one of the defi ning changes over the last forty years has been the integration of a range of communica- tion services through agencies, a process quickened by the need to have a range of knowledge and skills to work across the digital media landscape and its multi-platforms.
As we examine below, governing bodies of sport employ such agencies to fi nd exclusive sponsors for their sporting events, and to sell both the television and arena advertising rights to potential clients.
Television exposure becomes of central importance both in generating substantial rights revenue and providing global exposure for spon- sors who in turn pay handsomely to have their company linked with a premier sporting event. Given the massive sums of money now involved in elite sport this has also lead to potential unhealthy rela- tionships between such organizations and some governing bodies of sport. ISL, which worked closely with FIFA, collapsed in 2001 with debts in the region of £150 million. A Swiss court case in 2008 into accusations of fraud and embezzlement revealed that ISL had paid about £66 million in ‘bribes’ to secure various marketing and television
rights contracts (Daily Telegraph, 13 March 2008), while, as we note in Chapter 9 when we focus on the area of sports journalism, the powerful brokers of elite sport, including key sponsors such as Adidas or Nike, have also become more adept at managing their assets or brands and the media coverage that plays such an important part in this circuit of communication between sport, commerce, image and the fans (Boyle, 2006). In contemporary sports marketing, managing the 24/7 media is a key function in the battle to maximize your investment.
Global sports sponsorship: branding cricket
As a result of television becoming the driver of elite professional sport, it has come to dictate when, where and in what form sport can take place. The list of such examples of the economic stranglehold that television has over some sports would prove exhaustive if reproduced here. However, one example is the World Heavyweight Boxing title fi ghts which take place in London that are often staged at midnight in order to suit the American networks which are showing the fi ght live.
In the global fi ght to secure the television rights for sport the American networks dominate. The East Coast of the USA is the most densely populated part of the country, thus offering the audience that advertis- ers are anxious to reach and television can deliver.
Major sporting events such as the Olympic Games are staged to suit American television networks (NBC specifi cally) who are anxious to secure a return, through advertising revenue, on their capital outlay used in buying the television rights. In the case of the FIFA World Cup, it has been European television that has dictated, even when the fi nals have been played in America. Both the 1986 fi nals in Mexico and the 1994 fi nals in the USA saw some of the matches being played during the hottest time of the day in order to provide European television with prime-time live football.
At a national level, sports such as cricket have changed due to televi- sion’s insatiable appetite for more ‘entertaining’ forms of sports pro- gramming. This has resulted in the development of the one-day game, to the detriment some would say of the longer, more traditional Test matches, while in Australia television was instrumental in the initiation of the fl oodlit day/night matches. The sport now has one-day inter- nationals, a one-day World Series and a limited-overs Sunday League competition, all initiated by television and supported by sponsors keen to secure exposure.
The creation in 2008 of the Indian Premier League (IPL) marked a
A sporting triangle 51 new stage in the development between television, cricket and sponsor- ship. The creation of the IPL in cricket-obsessed India marked two trends in global sport. The fi rst demonstrated the ongoing battle for the control of sport between competing media organizations desper- ate to secure lucrative content and both sponsorship and advertising revenue. When the owner of Zee-TV, a major broadcaster in India, set up the Indian Cricket League, the reaction of the Indian Cricket Board was to sanction a rival IPL and sell the ten-year rights to the country’s Sony Television and the Singapore-based World Sports Group for
£800 million (in the UK, pay-TV company Setanta secured the rights).
The IPL creates eight franchises supported by both corporate India and wealthy individuals who bid for seventy-eight top international players in an auction (with the winning bid for each player becoming their annual salary). DLF Universal, an Indian company, paid around
£30 million for a fi ve-year sponsorship deal, with Pepsi becoming the offi cial drink of the tournament in a £6 million deal.
The second is around the governance of the game and the increasing diffi culty of harmonizing what has become a global sporting calendar.
The IPL is fundamentally a domestic Indian competition that allows each team to have eight overseas players, but its short season clashes with the English cricket season and potentially with interna- tional test matches. However, in a country that generates up to 70 per cent of cricket’s global income, money and powerful media and busi- ness interests exert massive infl uence on the sport and raise the more general question regarding elite sport in the twenty-fi rst century: who is sport actually for? With its showbusiness style auction, wealthy franchise owners and media and sponsorship fi nancial underwriters, the IPL demonstrates how a sport such as Indian cricket has become deeply embedded – and indeed dependent on – a complex relationship between commerce and the media.
Of course this is not an entirely new development and the impor- tance that sports place on their ability to secure television exposure means that rules have always been changed or altered to suit the needs of television. Barnett (1990) notes how American football was overtly tailored to fi t neatly into the pattern of advertising breaks on American television. Indeed, such is American television’s desire to guarantee a resolution of the sporting contest that a number of rule changes in various sports ensure that the matches cannot end in a draw.
In snooker, a sport largely reinvented by BBC television in the 1970s, matches were shortened to suit television. Domestic football matches in both England and Scotland which traditionally took place