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EXPERT VIEWSDominic FarnsworthPartner in the Media, Brands andTechnology Department, Lewis SilkinThe term ‘sponsorship contract’ does notreflect the nature of the modern relationship.The term ’brand partnership’ is more suitable.We are less frequently looking at simpleagreements where the property owner is paidto allow the sponsor to be associated with anevent, it is more of a two-way, brand-buildingexercise. A key area in a number of contractsis not what you can give us, and what wecan give you, but what can we achieve if ourcollective contacts, know-how and resourceswork together - this could be media content,new product developments or events.Contracts, therefore, need to be drafted in away that recognises and accommodates theBRANDS & MARKETINGBRANDS + MARKEfluidity of the modern relationship.Sure, there are plenty of definites to becaptured in the agreement, but it needs tobe able to create the framework for future,and as yet unknown projects. From a legalperspective contracting to agree on futureprojects is fraught with uncertainties but thebuilding blocks for successful co-operationcan be put in place. Morality clauses, forexample, are often a source of heateddebate during negotiations. An interestingdevelopment is the realisation that ’morality’clauses should be capable of biting both ways.A player/athlete may not want to be associatedwith a sportswear brand found to operatesweatshops, or a company responsible fora huge environmental disaster. It’s an arealong- destined to provide column inches.Charlie DundasDirector of Sports & EntertainmentSponsorship, MediaComIn my opinion, no two contracts can everbe the same given that individual clientrequirements are never going to be directlycomparable. However, the nub of this issuegoes back once again to the due diligencecarried out by the sponsor in the lead upto the deal. I accept that not all deals canhappen with the luxury of a long lead time.Nevertheless, it is incumbent upon anybrand considering sponsorship that theyhave clear and realistic expectations of themedium coupled with at least an outline ofa feasible activation programme that can bebespoke to suit the contract. The pay off fromthis approach should be that it is easier todraw up a bespoke contract which is free ofconfusion and one that enables both partiesto progress into a partnership. It is criticalin my opinion that the rights holder viewstheir role as ‘partner’ in the project. Thesponsorship should be mutually beneficialand on that basis, the rights holder has tobe obligated to support and assist the clientwith the successful delivery. Hence a wellconstructed,tailored contract is fundamentalto providing the framework and rules ofengagement on both sides.E.on have partnered the FA Cup since 2006 - Getty Images Sportarea - for example McDonalds and footballcoaches - in an attempt to give brands stand-out.”Today, the FA Cup is the centre of a powerstruggle in more ways than one. The incumbentsponsor E.on - a Germany-based energy firm,which has been the trophy’s partner since 2006- in a deal worth £8.3million a year to the FA.However, having decided not to renew thedeal, E.on has agreed to extend the relationshipfor another year, on the same terms, followinga late offer from the FA, which had failed tofind a replacement.“About 18 months ago we informed the FAwe wouldn’t be extending that contract,” saidSimon Breakell, E.on’s sponsorship manager.“It’s been a good partnership, we wouldn’t bewhere we are without it. But we didn’t wantanother long-term deal.“Then, at the semi-finals in April, the FAapproached us to ask whether we would go for ashort-term deal. At that time we were reviewingour sponsorship options, working with ourglobal head office in Dusseldorf to put togethera unified strategy. We didn’t think a short-termoption would be on the table. It allows us to taketime to work on our strategy.”Some observers point to the entrance intofootball of E.on’s competitor Npower (as titlesponsor of the Football League from thisseason) as a reason for the German company’sabout turn. “Npower coming in to football doeschange the landscape,” admits Breakell. “Wewere the only energy company in the game forthe last four years. Did it effect our decision?No. We were reviewing our options and notreacting to what other people do.”For sponsors, the essence of this story is,what do you buy when you buy the FA Cup?Tradition, romance, national coverage, football’sability to make headlines: each of these playa part. But in today’s more crowded sponsorenvironment, how do you put a price on that?A detailed breakdown of the property’s mediavalue was carried out for the FA by researchagency Sport + Markt, which was used as abenchmark by the FA during negotiations.The German research agency claimedthe famous trophy was worth £33 milliona year, with the domestic media rights valuedat £18.8 million, which Sport+Markt brokedown in the following way: association valueand status of the competition - £1.5 million;primary matchday media exposure -£5.5 million; secondary in-stadia mediaexposure - £1.1 million; print media value -£4.7 million; internet media value -£5.5 million; corporate hospitality, tickets -£500,000; and additional marketing assets- £100,000.Regardless of the values involved, thebreakdown of the rights in this way offers aglimpse of how rights holders such as the FAare cutting and dicing their inventory. This is aprocess that will only continue to evolve, saysE.on’s Simon Breakell: “Gone are the days whenyou take an off-the-shelf package and that’s all youget. The more creative brands are looking at howthey use sponsorship to reward their customers.”John Taylor, who has monitored the changesat first hand since that first FA Cup deal, saysthe current trend sees global rights holdersseeking fewer and deeper relationships. “Thiswill continue because brand guardians seemwilling to pay higher fees in an attempt to avoidbrand clutter,” says Taylor. “Everyone is seekingthe holy grail of brand differentiation andengagement. Any brand seeking this now hasto be extra careful in negotiating its rights anddevising a creative activation programme.”The question for football’s rights holders is,can they deliver on this dream?SportBusiness International • No.161 • 10.10 21
MEDIASHORTSTOPGoogle: The internet search engineannounced it will launch a freeservice allowing internet browsing viatelevision sets in the US this autumn.LFP: France’s top tier football leaguewas considering a buyout of FranceTelecom’s IPTV pay-television serviceOrange Sport, according to a leakedleague document. The platformwould become the basis of a leaguetelevision channel.DFL: The German football leaguewill tender the domestic rights tothe Bundesliga for 2013-14 onwardssometime in the next year. The tenderis being produced early to allow timefor regulatory scrutiny of any deals bythe German cartel authority and theEuropean Commission.English Premier League: Indovisionacquired the rights in Indonesia from2010-11 to 2012-13 in a deal with rightsholderESPN Star Sports. Matcheswill be shown on Indovision’s pay-TVchannels and on its sister free-to-aircommercial channels Global and TPI.Serie A: The 20 clubs of Italy’s topfootball division again failed to reachan agreement on how to distribute therevenues from this season’s centrallysoldtelevision deals at a leagueassembly. Income from broadcasterswill continue to be shared on the basisof last season’s individually-sold dealsuntil an agreement is reached.Mark Thompson: The director-generalof UK public-service broadcaster theBBC said pay-TV operator BSkyB shouldpay retransmission fees to the free-toairchannels it carries. His commentsechoed those of US broadcaster Fox,a sister company of BSkyB under theNews Corp umbrella, which has lobbiedfor retransmission fees to be paid byAmerican pay-TV platforms.BSkyB: The UK pay-TV broadcasteradded 90,000 subscribers net in thethree months to end-June, taking itto 9.86 million. The broadcaster is oncourse to reach its target of 10 millionsubscribers before the end of the year.Cycling: Australian broadcaster SBSagreed a three-year rights deal withthe Union Cycliste Internationale (UCI),from 2010 to 2012. The deal includesexclusive rights for all UCI World Cupand World Championship events.SPORTS FANS WANT MOREJust under half of sports fans in the UK want a broader and more diverse spreadof sports programming on leading TV channels, according to new research.FOURTY-ONE PER CENT of UK adults whowatch sport on TV either strongly agree oragree that lower-profile sports should be given agreater amount of broadcast coverage, accordingto research from SMG Insight/YouGovconducted for SportBusiness International.The areas of the UK where people agreedstrongest were Wales (45 per cent strongly agreeor agree), Northern Ireland (23 per cent stronglyagree), and Yorkshire and the Humber (47 percent strongly agree or agree).“Terrestrial channels will rarely give upscheduling time for anything other than the‘power sports’ and one-off ‘National Treasures’such as Wimbledon, The Grand National orBoat Race,” says David Stubley, former headof business development at UK commercialbroadcaster Channel 4 and managing partner ofmedia consultancy Sportent.“You would thinkthat leaves UK sportssubscriptions channels,like Sky and ESPN, witha home-run but, unless it’sfootball, they don’t generallyfeel it drives subscription. Paychannelshave two approachesto smaller sports: we’ll show itsomewhere, but won’t pay a rights fee; or youpay us to show it through bringing in a sponsor.”Respondents across a range of demographics- including both the highest and lowest socialand economic groups - reacted strongest to dartswhen given a selection of sports they wanted tosee more of on TV.No darts event is protected for free-to-airbroadcast on the UK government’s ‘CrownJewels’ list although public-service broadcasterthe BBC has the rights to the BDO’s WorldProfessional Darts Championships at theLakeside until 2013. According to TV SportsMarkets, in the top non-football UK sportsaudiences in 2009 on digital and satellite TV,darts took nine of the top 100 places.Events from rival darts body the ProfessionalDarts Corporation, run and promoted by BarryHearn, are shown extensively on UK payplatformBSkyB’s sports channels.Stubley suggests that with digital mediachanging the broadcast landscape and theLondon Olympics less than two years away, theresearch indicates that the door is open for a newapproach to smaller sports on UK television.“It’s hard to make a success of freeto-aircontent dedicated to a singlesport such as volleyball or gymnastics,but bringing a group of sportstogether under an umbrellabrand would work in myview, especially if thebroadcaster had theengine room of anexisting media partner.“It will require fundingand a smart approach tokeeping production costsunder-control, but Ihave a hunch a mediaWhich, if any, of the following sports would you be interested in seeing morecoverage of on leading UK TV Channels?Total Gender Social GradeSportBase Male Female ABC1 C2DECycling 14% 15% 13% 14% 14%Darts 16% 18% 12% 14% 18%Equestrian Show Jumping 7% 2% 13% 8% 5%Go Karting 8% 12% 3% 5% 12%Horse Racing 7% 9% 5% 5% 9%Jet Ski Racing 7% 7% 7% 6% 8%Motor Cycle Racing 13% 16% 7% 10% 16%Powerboating 8% 9% 6% 6% 9%Sailing 7% 9% 5% 8% 7%Snooker 14% 18% 9% 12% 17%Stockcar Racing 11% 14% 6% 8% 13%Superleague Formula Motor Racing 8% 10% 5% 7% 9%Rowing 8% 7% 9% 7% 8%Base: All GB who watch sport at least once a month Source: SMG Insight / YouGov Plc.22 SportBusiness International • No.161 • 10.10
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