AGENDA: Can the FA meet its goals? - A growing football industry and lucrative sponsorship and broadcasting deals are boosting the sport But is the FA ready to meet the commercial challenges and take advantage of the opportunities, asks Ian Darby.

Football in the UK has never been more popular. Attendances continue to rise, all-seater stadiums are in place following the Taylor report, and top foreign stars are adding lustre to the Premier League and FA Cup.

Football in the UK has never been more popular. Attendances

continue to rise, all-seater stadiums are in place following the Taylor

report, and top foreign stars are adding lustre to the Premier League

and FA Cup.



Deloitte and Touche research from last August shows that the UK football

industry has grown at a rate of 20% per year since 1992, faster than any

UK industry outside the computer sector.



Yet the Football Association, English football’s governing body, is

portrayed as bureaucratic, arcane and unwieldy, incapable of running and

marketing the game, let alone staging the 2006 World Cup. Its image was

tarnished further by the recent departures of chairman Keith Wiseman and

chief executive Graham Kelly, following an unauthorised pounds 3.2m loan

to the Welsh FA.



Ticket losses



The FA’s commercial aptitude has been questioned in the past. It managed

to snatch defeat from the jaws of victory during Euro 96, losing pounds

1.7m on a tournament with an overall profit of pounds 69m, due to

problems with tickets.



Profits were shared between UEFA, which took out pounds 20m, and

competing countries, which shared pounds 49m in prize money.



The FA derives its revenue from three sources: sale of broadcasting

rights, sponsorship of national games and the FA Cup, and licensing of

the Three Lions logo. It aims to reach a total of pounds 280m.



The bulk comes from the broadcasting rights to England and FA Cup

matches.



The FA is just over halfway through a deal with Sky and ITV worth pounds

150m.



This deal was negotiated before the arrival of commercial director

Phillip Carling, following Euro 96. Carling, who joined the FA from

Arsenal where he was marketing director, has focused on licensing and

sponsorship.



Last year the FA changed its sponsorship structure and developed the

’Football Associates’ scheme to attract ten core sponsors and generate

pounds 80m over four years. So far nine are signed up (see panel)

including FA Cup sponsor Axa which is spending pounds 42m over four

years on a core package plus FA Cup sponsorship.



Unlike Premier League contracts, sponsors receive important broadcasting

presence as well as advertising around grounds during games.



Richard Busby, chairman of sports sponsorship firm BDS Sponsorship,

says: ’I have a high regard for the packages the FA offers sponsors. It

has problems with the England team sponsorship. The word is it has had

to drop the price and if we have many more performances like the nil-nil

draw against Bulgaria this could go down further.’



Team tensions



Carling denies that the FA has had to reduce the asking price of around

pounds 15m over four years for sponsorship of the England team, but

Nationwide Building Society is reported to be close to clinching a deal

to sponsor the team for around pounds 11m over four years. The first

England sponsor Green Flag paid just pounds 4m for a similar period.



Carling defends the fact that it has taken a year to find a sponsor: ’We

weren’t in a position to renegotiate until Green Flag’s sponsorship

ended. My counsel was not to have a fire sale. It’s better to take time

to find the right partner.’



The FA is also pushing a series of licensing deals to stretch the

brand.



It is entering into an agreement with Hay and Robertson, owner of the

Kangol brand, to take England’s Three Lions brand beyond the pounds 50m

kit deal negotiated with Umbro. This deal will see branded England

clothes in upmarket stores such as Harvey Nichols and Selfridges to

target the fashion market.



Committee judgement



Despite such developments, the FA’s commercial arm is bound up in the

bureaucracy of the institution. Carling puts forward his strategy and

decisions are made by an eight-strong commercial committee, which sits

weekly and is chaired by Jack Wiseman, Birmingham City FC

vice-chairman.



Carling says he is not overly restricted by bureaucracy: ’We’re not

pushing through major structural changes which affect the game as a

whole so I haven’t come across the difficulties in getting decisions

made that others find.’



Mike Reynolds, director of the Institute of Sports Sponsorship, says:

’Commercial firms like dealing with organisations where decisions are

quick. But, given the constraint that a committee structure brings, the

commercial department at the FA seems to have a fair amount of

autonomy.’



Richard Moore, managing director of sponsorship and PR agency

Capitalize, has worked with Carlsberg-Tetley and Umbro on deals with the

FA. He says: ’The majority of sports bodies wouldn’t stand up to

standards in the City.



But you have to recognise that they have a responsibility to their

sports and try to understand their decisions.’



’Restructuring the commercial side has helped. The FA has worked hard to

change things,’ says Simon Marsh, European sports and marketing manager

at Umbro.



He says there were problems in the past to do with the sponsorship

packages offered. Now Umbro is happy that its commitment extends beyond

kit sponsorship to areas such as support for football at grass roots

level.



Any streamlining of the FA following the departures of Kelly and Keith

Wiseman can only be good for the game but it seems that the commercial

side of the FA has already been overhauled.



WORLD CUP 2006 BID



The main contenders



South Africa, Germany, England, Brazil, Egypt/Morocco



The rewards



- Profits, both for the Football Association and industries such as

tourism, could be massive.



- Last year’s World Cup in France produced a profit of around pounds

40m.



The Japanese FA hopes to make around pounds 30m profit from co-hosting

the 2002 World Cup with South Korea.



- The big money is in negotiation of TV rights which FIFA controls.



Worldwide rights for the 2002 and 2006 World Cups will net dollars 1.8

bn (pounds 1.1bn) for FIFA.



The England campaign



- A 14-strong World Cup 2006 bid team, headed by bid director Alec

McGivan, is in place.



- The bid is backed by the FA, the English Sports Council (now Sport

England), the FA Premier League and six corporate sponsors (British

Airways, Marks & Spencer, Nationwide Building Society, Daily Telegraph,

Deloitte and Touche, and Umbro).



- The bid team has a marketing resource headed by marketing manager

Dominic Hayes, formerly press manager at Procter & Gamble. It also draws

on the expertise of marketing professionals, such as Saatchi & Saatchi’s

joint chief executive Adam Crozier.



- Marketing activity targets key decision-makers overseas.



International media relations, direct mail to key football

administrators and ads placed in trade journals form the basis of

activity. Saatchi & Saatchi produces the creative.



- Hayes says recent problems won’t affect the bid: ’It’s still the same

stadia, communications infrastructure and travel conditions.’



FA MARKETING STRUCTURE

Marketing team Phillip Carling Commercial director (right)

Andy Oldknow

Marketing manager

David Smith

Commercial manager

Carling reports to eight-strong commercial committee and FA’s executive

committee

Key sponsors

Axa (FA Cup)

Carlsberg (FA Vase)

Umbro (FA Trophy)

Walkers (Youth programmes)

Coca-Cola (Charter for Quality) One 2 One (Charity Shield)

Eidos, Sainsbury’s, Arcadia

Agencies

Design

Design Bridge

Management of sponsor presence at events

IMG

Advertising

McCann-Erickson



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