Raising the admission fee

Will a revamped FA sponsorship structure appease its partners' gripes about value for money, asks Drew Barrand.

For sport's governing bodies, sponsorship-renewal negotiations are rarely trouble-free, and the Football Association (FA) has found it is no exception.

The cost of entry for high-profile sponsorship packages has risen so steeply in recent years that, inevitably, questions over value for money are now taking greater prominence in such discussions. In short, savvy sponsors are making a stand about how much bang they get for their buck.

To its credit, the FA has acted to appease their fears with the announcement of an overhauled array of sponsorship packages (Marketing, 11 January).

Gone is the existing pillar structure, which saw the five commercial partners - Carlsberg, McDonald's, Nationwide, Pepsi and Umbro - given equal exposure across the governing body's two flagship properties, the England team and the FA Cup.

In its place will be a single lead sponsor for each property, underneath which will sit three second-tier official partner packages, again for each property. Rounding off the available sponsorship opportunities are seven football development packages covering all the elements of the FA's wider work in developing the game, from schools football to the women's game.

The governing body's intention is that the two lead sponsorships will be sold to different brands, while the lower-tier packages will be cross-sold, with the FA signing a maximum of seven commercial partners in total.

'The restructuring was the consequence of a lengthy review during which we consulted with our existing partners at every step,' says FA group commercial director Jonathan Hill. 'We have effectively kept the elements of the current programme that have worked well, such as restricted exclusivity.'

Positive feedback

The revamp has, in general, been greeted favourably by the sponsorship industry, with the FA applauded for its recognition of the failures of the existing system and its willingness to listen to the views of its commercial partners.

'I am a fan of the new set-up,' says Sally Hancock, chief executive of sponsorship consultancy Redmandarin.

'It caters to the demand from sponsors for ownership in the packages, which the previous pillar system didn't. There is no doubt that the England team and the FA Cup are strong sponsorship properties, but it is perhaps true that they haven't been activated properly before.'

The FA has taken the lead-sponsor route before, with Littlewoods (1994-1998) and AXA (1998-2002). The latter tie, which introduced the moniker 'The AXA-sponsored FA Cup', resulted in the format being axed at the end of the contract. This was predominantly due to the fact that few media outlets referred to the competition using its full title, thus leaving the sponsor with far less media exposure than it had expected.

Hancock argues that any accent on exposure levels in the headline packages shows a lack of understanding of what the property has to offer, such as providing unique tailored services to fans.

'Football is already a cluttered market and to think that you can achieve standout simply by sticking a logo on a property is unrealistic. It is about how clever you are in activating the sponsorship across all communication platforms,' she says. 'AXA did a decent job on this front through its PR approach, and the criticism it received for lack of media exposure was a little unfair; that is not the principal benefit the FA Cup has to offer a lead sponsor.'

Typically for such deals, the heaviest criticism of the revised partner programme hinges on price. Speculation has placed the cost of the lead-sponsor packages at £10m a year for the four-year deals, which begin after this year's World Cup and run until 2010. The structure is expected to see total sponsorship revenue rise from its current level of £20m-£30m.

The FA's Hill admits that the rumoured £10m price tag for the headline sponsorship is close to the mark, adding that the price for both properties will be about the same.

But not everyone believes this to be an achievable figure, despite a favourable price comparison against other football properties of similar standing, such as the FA Premier League.

Nationwide has already balked at the asking price, stating in November that its six-year association with the FA will end after the World Cup.

Umbro, though, has been persuaded to sign up until 2010, albeit taking two packages at the second-tier level and one at development level. The remaining sponsors have all said that they are in 'positive negotiations', although Hill insists he is not afraid to look elsewhere.

'We are now out of the exclusive negotiating period with our existing partners. Although we are still very much in talks with Pepsi, McDonald's and Carlsberg about the new packages, we have now opened the process up to the whole market,' he says. 'Part of our aim has always been to look to bring in new partners to complement the existing ones.'

Paying the price

Whatever the consensus on value in relation to asking price, there is a strong argument that the FA will get the revenue uplift it craves.

'There are a lot of sponsors out there that are just land-grabbing as a way of getting into football, so the chances are the price won't put them off,' says Redmandarin's Hancock. 'Unfortunately, these are the types of brands that are not particularly savvy about the medium, concentrating their strategy on volume of media exposure, as opposed to where the real value of the FA's properties lie.'

The debate about whether the restructuring is a genuine attempt to meet sponsors' needs or simply a way to boost the asking price is essentially immaterial. The real problem will emerge if the FA fails to attract brands that fully understand how to activate the partnership.

Any approach based purely on the potential level of media exposure will serve only to reawaken the rumbles of discontent about value for money that resulted in ruptured negotiations this time around.

DATA FILE - FA TIES FA Cup England team Headline Headline sponsor sponsor 3 official 3 official partners partners 7 development packages Men's, women's, small-sided, schools, community, disability and FA learning football The FA is looking for a maximum of seven sponsors in total, with the opportunity for cross-selling across the various packages


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