Between now and October, sports fans have plenty to keep them glued
to the television. They have alreadywitnessed a sparkling start to the
Formula One season by Ferrari and, over the next two months, four
English football clubs will compete for top UEFA honours in Europe.
There is also the double whammy of football’s Euro 2000 championships in
Belgium and the Netherlands, and the Sydney-hosted summer Olympics.
Those two events alone will attract a cumulative global audience of more
than 25 billion viewers in 220 countries.
For marketers, the passion whipped up by such events is a prized means
of targeting consumers. Despite the Olympic movement’s corruption
scandal of the past year, the France ’98 World Cup ticketing fiasco and
the persistent trickle of drugs-related stories which afflict all major
sports, many clients will pay whatever it takes to get involved with big
To varying degrees, major sporting events generate revenue from four
sources: television rights, sponsorship, licensing, and ticket
In the case of the Olympics, TV sales will account for 50% of the
dollars 3.5bn (pounds 2.1bn) generated between 1997 and the end of 2000.
Sponsorship adds a further 36%, tickets 11% and licensing/commemorative
The poor showing of the latter category reflects the location of the
event. The success of Olympic licensing tends to be associated closely
with its venue, which is why the Atlanta ’96 licensing programme, based
in the sports memorabilia-hungry US, contributed 8% of the total Games
Major soccer events, by contrast, make money wherever there is a fan
base with a team to support. ISL Marketing’s licensing chief, Gerhard
Prochaska, predicts that Euro 2000 will rake in dollars 300m (pounds
182m), compared with the dollars 200m (pounds 121m) generated by Euro
For brand marketers, the main way to unlock the power of sports events
is through an official sponsorship programme. Although some companies
achieve widespread media exposure without paying for title rights, there
are risks inherent in ambush marketing.
The International Olympic Committee (IOC) calls it ’a parasite activity’
and claims there is ’strong disapproval of those who attempt to
undermine official sponsorship activities’.
In a survey of public attitudes, ’respondents expressed negative
feelings toward companies that engage in the practice of ambush
marketing,’ claims the IOC.
The fact that streetwise brands such as Sony PlayStation (Euro 2000) and
Nike (Sydney Olympics) have sought official sponsor status speaks
volumes about the perceived advantage of being a legitimate partner.
While sponsorship is about building brands, TV rights, ticketing and
licensing are fundamentally intended to generate revenue for the rights
holder - although there are obvious overlaps. The eyeballs reached via
TV viewing and event attendance are, for example, a major part of any
sponsorship. Similarly, the ubiquity of licensed products in retail
outlets promotes awareness of events, which in turn benefits
If all a sponsor does is badge an event, it gets media exposure and
brand association with the event and other sponsors.
But if that’s where it ends, the sponsor is under-exploiting its
Karen Earl, managing director of sponsorship consultancy Karen Earl,
says sponsors ’must look at more than just name awareness if they want
to ensure a return on their investment. Seasoned sponsors such as
Coca-Cola are masters at exploiting events effectively.’
Octagon Marketing media director Sean Jefferson views sports sponsorship
as providing a theme around which clients can build a multifaceted
marketing programme. ’Depending on their objectives, clients need to
apply the same rigour to above-the-line, sales promotion,
business-to-business and internal communications as they would
normally,’ he says.
Octagon represents five of Euro 2000’s top sponsors - each of which has
paid about dollars 20m (pounds 12m), simply for title rights. In March,
the IPG-owned agency added Korean car giant Hyundai to a list which
includes Cereal Partners Worldwide, MasterCard, Pringles and Sony
While Hyundai’s main aim will be to boost awareness and build image, the
likes of CPW, Pringles and Mastercard need to use Euro 2000 to sell
products and drive transactions. A key way of doing this is to offer
tickets to matches through competitions. ’Tickets will be like gold
dust. If you can offer something none of your rivals has, it will win
more shelf space from retailers. That helps increase your share of
sales,’ says Jefferson.
Some partnerships don’t look like obvious winners, but can be used to
great effect with a little imagination. Two good recent examples are
Sainsbury’s and BP, which became official retailer and official fuel,
respectively, of Team England at France ’98. Both acquired licensing
rights to support their sponsorships.
’You couldn’t walk into a Sainsbury’s store without knowing it was a
Team England sponsor,’ says CSS-Stellar vice-chairman Barrie Gill.
It had televisions on during the matches, gave out champagne when
England won and promoted tissues in case we lost.’
Sainsbury’s also stocked a range of soccer coins, posters, shirts and
mugs which, Gill claims, were popular with customers. ’There is no doubt
they drove traffic and sales during the event,’ he says.
BP’s approach was to back up its sponsorship with the licensing rights
to the official Team England World Cup book. Forecourt traffic was
boosted by a discount on cover price to customers in BP outlets.
Other clients support their sponsorships with highly visible,
on-the-ground activity. During France ’98, MasterCard gave away fold-up
maps, while at last year’s Rugby World Cup, Guinness introduced a wide
range of promotional devices in the vicinity of matches.
’Some of it can look quite bitty in isolation,’ says Jefferson. ’But
viewed as an integrated strategy, it is highly effective. Guinness was
pulling 150,000 more pints a day during the competition.’
As was the case for sponsors of Euro 2000, the 12 headline sponsors of
the Sydney Olympics, including Coca-Cola and Visa, have exclusive
worldwide marketing rights and opportunities within their designated
They can use Olympic imagery, appropriate Olympic designations on
products and take advantage of hospitality opportunities at the Games
While the Olympic association has its attractions in terms of branding,
it is the control of tickets which allows sponsors to generate
For licensees, meanwhile, the priority is to make revenue while avoiding
stepping on the toes of the major sponsors. Licensing for Euro 2000 is
managed by ISL subsidiary CPLG, which has signed up about 40 licensing
CPLG’s head of sport for Europe, Chris Protheroe, explains the exclusive
rewards licensees get for their money: ’Procter & Gamble’s Pringles have
the promotional rights to use the Euro 2000 marque on-pack, for
So we wouldn’t enter into a licensing agreement with a rival snack food
company to produce Euro 2000 snacks. The same goes for
The most lucrative area of licensing for Euro 2000 will be apparel. ’We
have a range of good quality fleeces, urban tops, socks and caps,’ says
Protheroe. ’The retailers demand quality because consumers expect
After apparel come games, pins, programmes, sticker albums, stationery,
balls, toys and a troll-like mascot for the competition called
None of the Euro 2000 leisure apparel will have a prominent brand name
attached to it. But Adidas will provide a range of branded sportswear -
underlining the thin dividing line between some sponsorship activities
Although non-Adidas products are unbranded, they do have significance to
retail brands. ’Euro 2000 will be massive and retailers want to be
associated with it,’ says Protheroe.
’We know that licensed product drives footfall, because the market has
grown 20% worldwide between 1995 and 1998. It can also say something
about the character of your retail brand.’
Lack of exclusivity
For a troubled store chain, such as Marks & Spencer, events such as Euro
2000 present an opportunity to win back young customers. But the
drawback from a retailer’s perspective is lack of exclusivity. By the
very nature of its job, CPLG will seek to put Euro 2000 goods into as
many reputable outlets as possible.
An alternative approach for retailers is to take a sponsorship or
supplier position. In February, M&S unveiled a ’Gold Club’ sponsorship
with the British Olympic Association. As part of the deal, it will
supply fashionable formal wear to the British Olympic Team - working in
partnership with Karen Earl.
Unlike licensed product, this deal gives M&S an exclusive position.
According to sponsorship manager Sean Curtis, the partners are
complementary. ’We are still the largest supporter of UK manufactured
goods in the retail sector and this is a major opportunity for us to
support the best of British,’ he says.
Most sports property owners are looking for ways to generate incremental
revenue from licensing. In the process, some are also seeking to
establish themselves as brands in non-core businesses.
The Licensing Company was recently handed the task of creating a brand
extension programme for Royal Ascot. The core activity centres on a
range of exclusive clothing, dubbed The Royal Ascot Collection, which
will be available exclusively to Selfridges, London, from April.
Track and field governing body UK Athletics has also moved into the
licensing field by appointing MTC to handle a licensing and promotional
MTC’s managing director Jonathan Marks says: ’Licensing introduces the
image of a sport to new audiences and we have high hopes of introducing
a back-to-school range for kids.’ Other areas of ancillary activity
could include timepieces, publishing and CD-ROMs.
Marks adds that the timing is perfect given that UK Athletics now has a
four-year television deal with the BBC which involves live coverage of
between ten and 12 events a year. He also expects some rub-off from the
hype surrounding the forthcoming summer Olympics.
There are blurred areas where some brands cut across traditional
commercial models. Computer games manufacturer Electronic Arts is a
Having sold seven million copies of its FIFA 98 game, it is now
producing a game for Euro 2000 which is likely to be the top-selling
title of the summer.
Not only does this generate royalties for UEFA, it acts as a
brand-building exercise for Electronic Arts in a way that is
conceptually different from other licensing arrangements.
The emergence of dotcom sponsors is also forcing a reappraisal of the
typical commercial blueprint. At the moment, it is unclear whether
dotcoms should be treated as a category of their own for major events or
as directly comparable to bricks and mortar companies.
Dotcoms have the potential to be more than just sponsors. Sportal, which
is rumoured to be a Euro 2000 sponsor, can offer the event sponsorship
money and, potentially, a new distribution outlet. At Euro 2004, for
example, a company such as Sportal might pay a reduced sponsorship fee
in return for providing a new media platform for viewers and a
distribution outlet for licensed product.
There are similar resonances in Manchester United’s pounds 30m
sponsorship deal with mobile phone giant Vodafone. Vodafone’s commercial
director, Paul Donovan, made it quite clear when the deal was signed in
February that it is more than just a title sponsorship. Branded phones
and the delivery of sports news to Manchester United fans via
WAP-enabled phones are two possible applications which may spin out of
Making music pay
The dynamic relationship between sport and fans plays a key role in
inspiring marketing innovation. A classic example is the work that music
marketing agency Music & Media Partnership (M&MP) has done in developing
relationships between sponsors and the music that accompanies sports
M&MP’s managing director, Rick Blaskey, has produced theme tunes for
three Rugby World Cups and football’s France ’98 and Euro ’96. He is now
working on an album of football chants for Euro 2000. According to
Blaskey, musical themes such as the Lightning Seeds’ Euro ’96 anthem,
Three Lions, can do three jobs: generate revenue, brand events and
provide a sonic logo for use as part of a sponsor’s marketing plan.
During Euro ’96, the event theme played a key role in Coke’s
’This time we are working with Coke, McDonald’s, Pringles, MasterCard
and Electronic Arts to find ways of using the music to help them,’ says
Blaskey. ’Anything from using the theme in TV ad executions to
organising a Euro 2000 concert is a possibility,’ he adds.
’When you pay this much money, you have to find ways to tap into the
passion and excitement across media channels to reach the target
audience,’ he says.
But the big question for any sponsor or licensee at an event such as
Euro 2000 is what happens if England flops. Octagon’s Jefferson reckons
that a poor England performance could cost Euro 2000 about 10%-15% of
its UK audience. Success will result in the 25 million audiences who
witnessed Euro ’96 and France ’98.
ISL’s Prochaska makes a similar assessment. But, he argues, in licensing
terms, a failure in one territory means a success in another. With
sponsorship and licensing programmes at Euro 2000 designed to work
across borders, a downturn in one country is often balanced by an upturn
That said, UK sponsors would rather see an England versus Germany final
than Norway versus the Czech Republic. For Sainsbury’s, at least, it
would be another chance to roll out the Kleenex.
- Euro 2000 kicks off on June 10. The 12 sponsors, which have paid about
pounds 12m each for title rights are: Carlsberg, Coca-Cola, Fuji Film,
Hyundai, JVC, MasterCard, McDonald’s, Philips, Sony PlayStation,
Pringles, PSINet and Sportal. The event is expected to reach a
cumulative audience of seven billion in 210 countries.
- The commercial side of the event is being handled by ISL and its
licensing subsidiary, CPLG. Product lines from 40 licensees are expected
to generate pounds 180m, compared with pounds 120m for Euro ’96, when
there were 100 licensees.
- ISL has already started work on World Cup 2002, which will be held in
Japan and South Korea. Despite the time difference from Europe, a drop
in licensing revenue compared with France ’98 is not expected. It is
rather seen as an opportunity to open up the Asia-Pacific market.
- The Sydney Olympics will be held between September 15 and October 1.
It is not clear how many viewers will tune in because of the time
difference. Atlanta achieved 20 billion cumulatively compared with 16.6
million at Barcelona 1992.
- Between 1997 and 2000, the Olympics will have made pounds 3bn. The
lion’s share comes from the sale of TV rights - including pounds 800m
for Sydney and pounds 310m for the 1998 Winter Games in Nagano. It also
managed to extract pounds 190m from 12 major sponsors: Coca-Cola, John
Hancock, Kodak, IBM, McDonald’s, Panasonic, Samsung, Sports
Illustrated/Time, UPC, Visa and Xerox.
- For the run-up to Athens 2004, six sponsor companies have signed up so
far: Coca-Cola, Gateway, SEMA, TIME/Sports Illustrated, Visa and John
Hancock. The sponsor programme is forecast to generate in excess of
pounds 365m in financial and technical support.
- Licensing at Atlanta secured pounds 30m, compared with pounds 27m for
Sydney. As was the case for Euro 2000, the Olympic movement decided to
reduce the number of licensees for Sydney. About 60 were appointed,
compared with 100 for Atlanta. Some 12% of tickets are to be made
available to overseas visitors.
- Historically, Olympic licensing programmes have been short-term,
focusing on Olympic Games memorabilia. The IOC is now working to develop
a licensing programme that can enhance the overall image of the Olympic
Movement and the Games.
2000’S SPORTING HIGHLIGHTS
Climax of Lloyds TSB Six Nations Rugby
Martell Grand National
Flora London Marathon
British Grand Prix
Badminton Horse Trials
Sagitta Guineas Festival
First Test England vs Zimbabwe
FA Cup Final
Tennent’s Scottish Cup Final
Monaco Grand Prix
June 10-July 2
First Test England vs West Indies
June 26-July 9
Henley Royal Regatta
British Open Golf
July 29-August 5
Skandia Life Cowes Week
One2One FA Charity Shield
Sept 15-Oct 1
Oct 28-Nov 25
Rugby League World Cup
Source: Hollis Business Entertainment Yearbook