Sports sponsorship

Until recently, few people outside the motorsports fraternity had heard of Lewis Hamilton. Now, as he leads the Formula One drivers' table, he is a household name. His success is great news for his McLaren team's backers, Santander and Vodafone, but for brands interested in using the driver in the future, he won't come cheap.

Hamilton's rise - from karting to the top flight in just five years - underlines how quickly a sponsorship star can be born. It's no surprise, then, that a growing number of brands are trying to catch similar prospects early. It is already an established tactic for sportswear brands - young British golfer Ollie Fisher is tied in with Nike, while Adidas has deals with footballer Daniel Sturridge and tennis hopeful Laura Robson - but the approach is now being adopted by companies not generally associated with sport. Group4 Securicor and US telecoms firm Vonage, for example, have set up young athlete schemes. Visa has a Team Visa programme, while King of Shaves sponsors a number of 'Young Blades'. Even B&Q has Olympic hopefuls working in its stores in return for the DIY chain's backing.

There are several reasons to get involved with young athletes. Backing them early in their career costs a brand relatively little, and if they hit the big time, it will have saved itself a small fortune compared with firms that spend lavishly on established stars. It's also worth remembering that sportsmen and women are notoriously superstitious; if they get to the top with a given brand, they are often unwilling to change a winning formula.

Vonage is among the brands with strategic reasons for being involved. 'It is a young company that arrived in the UK from the US and Canada,' explains Alex Brown, who manages the Team Vonage account at sports marketing agency Fast Track. 'It chose to support five athletes it felt best mirrored its qualities - young and emerging talent with the ability to achieve big things.'

Emerging athlete schemes can also be used to bring meaning to a broader sponsorship strategy. 'Olympic sponsors need to establish a "reason for being" to promote their association effectively and engage consumers,' says Tom Silk, managing director of Velocity Sports and Entertainment, who works on Team Visa. 'Strategically, Visa's support of athletes gives it the hook that allows it to communicate with multiple stakeholders in a locally relevant manner.' The finance brand and Olympic sponsor, which launched its scheme in 2002, recently unveiled its 16-strong team for the Beijing 2008 and London 2012 Olympics, split evenly between 'hopefuls' and 'apprentices'.

Such initiatives often form part of wider CSR programmes. In June, Group4 Securicor launched its global sponsorship programme 4teen. The scheme, mentored by Ethiopian long-distance runner Haile Gebrselassie, gives assistance to a diverse set of athletes from the company's developing markets.

Targeting young teenagers may seem a long-term investment, but Clifford Bloxham, vice-president of athletes and personalities at Octagon, says brands often see a quick return. 'The gap between a prospect being a promising junior to winning on the world scene is getting shorter as they are getting into professional habits at a younger age.' Last December, Octagon client Robson, then aged 12, won the Eddie Herr tennis tournament, a title held by Maria Sharapova just six years ago.

London 2012 is a major driver of emerging-athlete schemes in the UK, and the media runs regular features on youngsters with a chance of glory on home turf in five years' time. It is no surprise that two of Britain's brightest prospects, distance runner Emily Pidgeon and sprinter Wade Bennett-Jackson, have been courted by consumer brands such as Virgin.

Will Oscroft, director at 141 Worldwide Sports and Entertainment, has noticed a rise in the number of brands interested in deals with emerging stars and expects greater interest as London 2012 nears. 'As it becomes apparent who will have a realistic chance we should see more brands trying to develop these sponsorship platforms,' he says.

Some in the industry believe brands are setting up schemes to gain Olympic associations without paying for rights. 'I could count 30 deals that are transparently Olympic ambush marketing,' claims Tim Crow, chief executive of Karen Earl Sponsorship. 'A lot of brands are looking at these schemes for 2012.'

Ties with athletes in Olympic blue-ribbon events may seem more advantageous than backing those in minor sports, but lower-profile disciplines should not be overlooked. King of Shaves enjoyed a considerable return on its investment in British women's skeleton bobsleigher Shelley Rudman, who won silver at the 2006 Winter Olympics while part of its 'Young Blades' initiative. She is now an ambassador for the scheme, whose current members include Bennett-Jackson. In rare cases the sport can become almost irrelevant to a partnership - Sir Steve Redgrave, for one, arguably became bigger than his event.

There is, however, no guarantee any of these prospects will make it. For every Andy Murray, who turned pro in 2005 with a team of sponsors already in place, there is a Sonny Pike, the English subject of a documentary while at the Ajax football academy in Holland who subsequently failed to make it to the professional ranks.

Equally, no athlete is certain to stick with a brand, though early investment can lead to loyalty. 'If as a sponsor you simply pay your cheque in return for brand exposure, you buy a commodity, and commodities sell to the highest bidder,' says Graham Fleet, managing director of IMG Consulting Europe. 'But if you buy into a personality and invest in the person for the benefit of all, anyone would think twice about accepting a higher offer.'

The usual risks of associating a brand with a high-profile individual also apply; such a tie-up can backfire if an athlete is involved in a scandal, for example. Oscroft says any brand thinking of developing a sponsorship programme should consult a sport's governing body to find prospective stars. Visa chose its athletes after talking to oarsman Redgrave and Dame Tanni Grey-Thompson as well as bodies including the British Olympic Association and LOCOG, according to Colin Granell, executive vice-president and head of partnership marketing at the company.

The easy route for brands will always be to wait for an athlete to enter the public eye then flash the cash; for many, that remains an effective, if expensive, strategy. Backing a prospective winner requires patience, extensive groundwork and investment in several different athletes. But pick up the next Lewis Hamilton, and the payoff will more than make up for it.

EMILY PIDGEON 18

Sport: Athletics (long-distance running)

Brands involved: Virgin Atlantic, Nike

Achievements: European junior 5000m champion, 2005; junior world qualifying times achieved at 1500m, 3000m, 5000m and steeplechase.

Commercial potential: The best comparison is with Paula Radcliffe, who at the peak of her career was earning an estimated £1m-£1.5m a year from sponsorship deals with brands including Nike, Cadbury Trebor Bassett, Vittel and Tesco's Sport for Schools and Clubs. Success at London 2012 would make Pidgeon a household name.

PAUL DRINKHALL 17

Sport: Table tennis

Brands involved: Visa

Achievements: British number one; chosen to carry flag for Great Britain at the 2007 Youth Olympic Festival in Sydney; the youngest player to win the national singles title in 45 years.

Commercial potential: While table tennis will never bring in the sort of sponsorship seen in the more mainstream sports, history shows that British Olympic success in even low-profile disciplines can bring a flurry of media interest. Drinkhall is already a member of Visa's group of young athletes. If successful, he could earn in the region of £250,000 a year when media interest is at its peak.

OLLIE FISHER 18

Sport: Golf

Brands: involved Nike

Achievements: In 2005, Fisher became the youngest competitor ever to play in the Walker Cup at the age of 16. In 2006 he became the youngest winner of the St Andrews Links Trophy.

Commercial potential: Golf has always been an attractive property for luxury brands - Tiger Woods is the world's highest-earning sportsman on the back of deals with Nike, Titleist, American Express and Rolex, among others. Closer to home, Scotland's Colin Montgomerie earned an estimated £5m in off-course income last year, according to Golf Digest magazine.

CASE STUDY - HITS AND MISSES

HIT

- Lewis Hamilton - Motor racing

The 22-year-old Formula One ace who has come from nowhere this season has fallen into the laps of the McLaren team sponsors - Vodafone and Santander - particularly as he is currently able to work only with the team's backers. Many industry experts believe that McLaren will change its rules to accommodate Hamilton's commercial potential rather than risk losing him to a rival team at the end of his contract.

- Andy Murray - Tennis

When he came to prominence in 2005, Murray already had four endorsements - RBS, Robinsons, Head and Fred Perry. RBS, which has sponsored him since 2004, has since extended its deal, although Robinsons was dumped in favour of Highland Spring, which signed a £1m deal with Murray late last year.

- Kevin Pietersen - Cricket

Cricket bat brand Woodworm signed up Pietersen in March 2003. At the time he was an up-and-coming county player, still 18 months away from his England debut. Its faith was more than repaid when he took a starring role in England's 2005 Ashes win; the brand has now signed him up for the rest of his career.

MISS

Dwain Chambers - Athletics

Early in his career, Chambers secured a contract with Adidas worth £100,000 a year, excluding performance-related bonuses. But before he could live up to his early potential, he failed a drugs test in 2003, leading to a two-year ban. He briefly returned to athletics in 2006, then took up American Football, signing for NFL Europa side the Hamburg Sea Devils. However, the league is now set to close due to heavy financial losses.

MAYBE

Theo Walcott - Football

Nike signed a boot deal with the footballer when he was just 14. Whether that was money well spent is yet to be seen. Despite his big-money move to Arsenal and surprise inclusion in the 2006 England World Cup squad, he has yet to justify the hype, but at only 18, there is still time to prove himself.

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