01 cover sbi 152.indd - FIFA/CIES International University Network

PETER HUTTON
CHIEF OPERATING
OFFICER, TAJ TV
PAUL SAMUELS
EXECUTIVE DIRECTOR,
AEG SPONSORSHIP
KEVIN ROBERTS
EDITORIAL DIRECTOR,
SPORTBUSINESS GROUP
“The new format [Twenty20] has
certainly led to some huge deals, but
it’s also created problems for the
value of the traditional game.”
“Teams, governing bodies and owners
are going to have to perform, behave
and play by the rules - they need to
make the sponsorship sell easier,
not harder.”
“Whenever government interferes in
the sports market, something goes
wrong. Just look what happened
when the European Union decided
Sky had to give up part of its Premier
League TV package.”
IT’S BEEN A TOUGH YEAR. Even the Indian
cricket board rights have decreased in value. The
one-off tournaments that normally spring up
every month have simply failed to find buyers.
Currency fluctuations in our core markets in
the Indian sub-continent also played a major role.
Most rights were bought in US Dollars, most
income was in Indian or Pakistani rupees, whose
fall increased the pressures.
The Champions League cricket was the most
notable economic failure. ESPN-Star’s ten year,
billion dollar acquisition, failed to excite
advertisers or viewers to the degree expected and
has considerable ground to make up. It was
perhaps a reality check for the value of Twenty20
cricket. The new format has certainly led to some
huge deals, but it’s also created problems for the
value of the traditional game. The smaller cricket
boards have now realised, perhaps too late, that
the IPL’s riches are based on the same
advertisers that have brought them such
increases in their own incomes over the years.
The current arguments over cricket’s next
five-year fixture plan sum up the consequences of
overcrowding in the mind of the viewer and
advertiser. The actual or effective windows for the
ICC or IPL based events mean that the big four
boards (India, England, Australia, South Africa)
increasingly just want to play each other in the
few months that remain.
The power base of cricket has further shifted as
the likes of the West Indies or New Zealand
boards became more reliant on the hand-outs
and favours from the ICC or the Indian board.
Away from cricket, the developments in our
Middle East backyard have been fascinating. Pay
TV has made no business sense in the area.
Rights figures have escalated way beyond the
potential income from a small pay market.
Showtime and Orbit have consolidated the
English speaking audiences. ART and Al-Jazeera
have consolidated the major football rights.
Yet, Abu Dhabi media’s purchase of the Premier
League and development of a major media hub in
the UAE’s capital has led to the potential
emergence of a new force in the region’s
television game. The Abu Dhabi decisions on
distribution and future strategy may well be a
story to watch in 2010.
IT IS MAJOR INCIDENTS off the pitch which have
rocked sport in 2009 - from the allegations of
cheating by Briatore to the Harlequins Bloodgate
scandal. These incidents along with the economic
downturn will have corporate organisations
revaluing their sponsorship spend.
This hit to sponsorship revenue streams, along
with the change to the major sporting television
rights, could stunt sports investment.
The industry needs to weigh up whether a
greater audience watching a sport will lead to
more interest and excitement in that sport, and
ultimately participation at grass roots level.
If it doesn’t, the lack of big money which was
previously poured into sporting bodies through
the purchase of TV rights will be hugely
detrimental. Reducing investment in this area will
see a lack of development across the board - and
we only have to look back at the success of
Beijing to realise how much direct investment in
athletes can achieve.
I am strong believer in naming rights and have
no doubt this will be high on the agenda in 2010.
Spurs, Everton and Liverpool have all talked
about new stadiums and the selling of naming
rights offers brands strong opportunities to reach
new audiences - but this is still in the very early
stages. With established clubs like Chelsea and
Newcastle looking for potential naming rights
partners, they need to take into consideration the
failings of The BT Cellnet Riverside Stadium and
the Friends Provident St Mary’s Stadium, which
have made me wonder if some owners and
management teams really understand what
naming rights is all about. Sports Direct.com @ St.
James Park really sums this up.
Commercially it is going to be another tough
year, so players, teams, governing bodies and
owners are going to have to perform, behave and
play by the rules - they need to make the
sponsorship sell easier not harder.
With greater accountability we need to
demonstrate ROI and the entire industry needs to
be responsible for demonstrating its effectiveness
to keep us at the forefront of marketing decision
maker’s minds.
IT WAS, ON THE FACE OF IT, a meaningless match.
A dead World Cup qualifying rubber between
Ukraine and an England team which had already
qualified for the finals in South Africa.
In fact it was so dead that no UK broadcaster
was willing to meet the asking price for the rights,
an unheard of situation in a football mad nation.
So up stepped digital media company Perform to
stream the game live over the internet at £4.99
($6.30) a pop. The move created ripples
internationally. While some sports events have
routinely been streamed for years, this was the
first time that a webcaster had stepped in to
replace the anticipated television service for a
major football international in quite this way.
Perform claimed an audience of around 500,000
and reviews of the service were distinctly mixed.
But this is a Genie which can never be put back in
its bottle. It provided proof absolute that the rights
market for live sport is no longer a simple
competition between established broadcasters and
that - for certain properties in certain
circumstances - there are new kids on the block.
While this provided a glimpse into the future,
2009 also saw the past re-emerging in the form of
fresh Listed Events recommendations in the UK.
These are the sports events which have to be
shown live on free-to-air television, driving a coach
and horses through the notion of free competition.
The England and Wales Cricket Board is furious
that there are moves for its Crown jewel event - the
home Ashes tests against Australia - to be
returned to the free domain from Sky Sports which
shows ALL its other properties….even the less
popular ones... The Board reckons it may cost
them £100 million which would otherwise be
ploughed back into sport.
Whenever a government interferes in the sports
market, something goes wrong. Just look what
happened when the European Union decided
BSkyB had to give up part of its Premier League TV
package. Fans had to pay more and Setanta
couldn’t make their minority interest work. And
went bust.
The result... chaos and financial misery for the
people in football who can least afford it. So a
memo to governments re 2010: Back Off….Please.
SportBusiness International • No.152 • 12.09 71