December 2008/ January 2009 edition


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 David Beckham - on loan for 2 months to Milan football (soccer) club - is now sporting the number 32 shirt.  Red and black stripped Beckham jerseys immediately went on sale in the soccer-mad Italian city. Sports Interactive, the computer games company has gone into the fragrance business by designing 'sweaty football' perfume. A blend of the the scent of grass, sweat, boot leather and Deep-Heat style spray makes for one 'unforgettable' scent which is guaranteed to get the ladies 'going'! The inaugural Champions League Twenty20 cricket competition in India has been postponed until October 2009 following the recent terrorist attacks in Mumbai Sterling Equities, an investment firm led by New York Mets owner Fred Wilpon has confirmed that it was a client of Bernard Madoff, the trader and money manager accused of orchestrating Wall Street's largest ever fraud. Wilpon co-founded Sterling in 1972 to develop and invest in real estate, and he remains its chairman. Watch out for any Mets fall-out! With a little help from the US government General Motors will - in light of current economic conditions - review its sponsorship activities as part of a plan to cut its marketing and promotions budget by 20 percent (or more?).  As of 2009, Toyota and Audi will take over from GM as the New York Yankees' auto sponsors.  GM sponsored the Yankees from 2006-2008.  The new sponsors' deal includes ballpark signage.  The Berlin Senate, the government of the German federal state of Berlin, is to provide US$7.1 million in additional funding for the city's Olympic Stadium renovations to meet the requirements necessary to host the athletics' 2009 IAAF World Championships. Salzburg, Austria has withdrawn its offer to step in if Sochi - the Russian city chosen to host the 2014 winter Olympic and Paralympic Games - is unable to complete the required facilities on time. FIBA, basketball's world governing body has confirmed that it will 'decide the fate' of the 2010 Men's World Championships in May 2009 after expressing 'extremely high concerns' over Turkey's preparations to host the event.   Subaru, the Japanese car manufacturer, has announced that it is withdrawing from the World Rally Championship after 19 years.  The company attributes its decision to the global economic crisis.   The England and Wales Cricket Board is to part company with one of its longest-serving sponsors in 2010.  Vodafone, the mobile telecoms giant, has announced that it is to end its support for the England team.   Fifa has confirmed that it will announce the winners of the hosts of the 2018 and 2022 on the same day.  The losers of the 2018 bid can immediately enter the 2022 vote only if they are not from the same continent as the 2018 host city winner.  But the question is... will they have to submit two bid books?   Golfer Seve Ballesteros is recovering well from a recent brain tumour and plans to captain the European team in the 2010 Royal Trophy tournament against Asia.   French Dakar Rally motorcyclist, Pascal Terry was found dead after the fourth leg of the race which took place in a remote area of Argentina.  As yet the cause of his death is unknown.

spotlight on: predictions

Public relations agency, Weber Shandwick launched a new Sports Division to the media in November 2008 and set the tone by publishing the results of their commissioned report 'Sport in the Downturn'.

Presenting the results of 'Sport in the Downturn' - based on research undertaken a few months prior to the launch - Simon Chadwick undertook to flag some of the key issues and criteria which might impact upon the sports industry in a recession.  Chadwick used previous downturns in conjunction with an analysis of events spanning changes in the last ten years of the sports industry to conclude that 'Sport' was more recession resistant than other sectors.  This resilience was due to its distinctive customer experience which offered an array of positive benefits, combined with minimal brand switching.  Support Manchester United and you are a lifer.  Enjoy cricket, and it becomes a lifestyle.  However, Professor Chadwick has recently reviewed his position due to the obvious fact that 'the global downturn has moved from a financial crisis to a recession'.   And his 'revised' position based upon the 'updated' current crisis is hardly encouraging.  In November 2008 he predicted that top tier international sports would prove relatively recession resistant, but in the last few months events indicate that the industry as a whole may fall foul of the credit crunch. Chadwick not only questions whether the Sports industry is equipped to manage a downturn; he also considers - like many others - whether 'Sport' is a business; or rather an amalgam of entertainment, national pride, health, fitness, competition, and of course that intangible but very important 'feel-good' factor.

At shortsandsports we share Chadwick's most recent opinion; but with a few revisions/additions: First, sport should fall into the same category as entertainment.  In hard times consumers seek out affordable up-lifting experiences as a distraction to the harsh realities of the everyday. Secondly, there should be a direct correlation between disposable income and the durability of the sports industry.  The strength and depth of the fan base will soon dictate and impact on future sponsorship deals; the price paid for media rights; and the extent of discounted ticket prices. (See other stories in this credit crunch issue for examples.)

Similarly, major sports/sports events will share the same 'survive and thrive' constraints as anyone else in a recession.... where there are no survivor guarantees! Well run, cost effective and prudent organizations which offer sensible, creative solutions and serve up the best in entertainment will stand the best chance of staying the course.  In difficult times, the industry must practice a consumer driven strategy to ensure that sports' enthusiasts continue to spend their disposable income on sport. 

  And finally, without structuring the components that co-exist and translate into a 'thriving industry-financial equation' - full stadia, significant audience ratings, corporate sponsorship, etc. -  fall-out in sport will be no different to the toxic debt that has proved terminal in other sectors. The British sports industry must - sooner or later - define itself at the macro level and then support itself at the micro level with a with well-defined economic strategy that takes into account the whole as well as the parts. 
If not, it is at risk of coming apart!

hot spot: WANTED: Super Bowl advertisers

The majority of traditional Super Bowl sponsors - that likely paid up before the real impact of the economic crisis really kicked in - will once again be very 'visible' to their 100 million viewers.  And while Super Bowl advertising regulars like FedEx Corp., Garmin Ltd., Salesgenie.com and General Motors Corp. are sitting out this year's football championship to be held on February 1, 2009 in Tampa, Florida, sponsor Monster Worldwide Inc. will be returning following their last appearance in 2004.

Typically, the Super Bowl advertiser acknowledges the importance of the event and the fact that these 'precious' slots set the marketing tone for the rest of the year.  But even the Super Bowl has felt the immediacy of the severity of the impact of the economic downturn.  

NBC - with a total of around 67 spots for Super Bowl XLIII - had sold around 88 percent by September 2008 (typically, only 60 percent of the slots are sold by that time of year); and 85 percent of these 30-second spots each sold for about US$3 million. However, a recent audit showed that while NBC continue to negotiate with other potential advertisers, eight 30-second advertising spots remain open.

So if you have deep pockets, you may find that this year could be your opportunity to appear during one of the Superbowl's iconic commercial breaks.  And potentially for a bargain price!

hot shot: speedo Phelps

Underlying everything that is sport is the idea that there should be a reasonable amount of competition.  If there is too much of a level playing field then there are no surprises, no excitement and no heroes; however, if the odds favour one or just a few, the spirit of competition is diminished.

   Watching Usain Bolt at the Beijing Games was an exceptional moment in sports history; and the same may be said for Michael Phelps' huge achievement. However, ever since Fina, the international swimming federation, approved the NASA designed Speedo LZR racer worn by Phelps and many other competitors, records have been broken at an alarming rate. Within six weeks of the launch of the suit, eighteen world records had fallen. Speedo wearing athletes in the Beijing pool won 89 percent of the Olympic medals. 

Which begs the question: in the case of swimming, is rocket science good for the sport?

According to Fina, as a result of the Speedo LZR racer, the future of the sport is in jeopardy. But why should Fina care how quickly a swimmer can glide through the water?  Well of course it is all down to money.  Without the competition element assisted by different brands developing ever-evolving superior equipment, the sound of the sponsorship cash tills may fall silent.  Spectators can still enjoy the competition, but the sport will be the poorer for it.

The new millenium sports industry is entirely dependent upon and driven by big business.  Without investment in new products and technology and without sponsors, the modern athlete cannot survive.  Today, in the case of swimming, there is probably only one baby left in the bath water, as Speedo's rocket science technology has just blasted its main competitors out of the pool.  Nike abandoned ship in 2008 and Adidas in threatening to do the same. 
In May 2008 TYR flagged the severity of the problem.  Having spent three years and several million developing the Tracer Rise suit - the company filed an anti-trust lawsuit in California accusing Speedo, USA swimming and its national team head coach, Mark Schubert of conspiring to block competition.
While more 'product' is on the way - a shoulder-to-ankle costume that boosts performance by interacting directly with a swimmer's central nervous system and brain - the swimmer's performance has become more and more marginalized as the debate over technology dominates.

Fina is left will little choice but to withdraw its approval of high-tech suits from international competition.  If not, the federation will have little or no leverage to negotiate with a 'monopoly' manufacturer.  Speedo will just name its own price!  And while the swimming may still be exciting - with all the competitors wearing the same costume, there may no funds to investment in new worldclass facilities.

Competition is a fascinating subject. Too much competition or not enough?  Too high-tech or too low-tech?  Product over performance? A sports federation has to balance all the participants in a industry that is becoming ever more complex. And the irony of this saga is that the skill of the athlete bears no role in the debate.


sidelines: a revolving door between heart and mind

And while 'prudence' has taken over from 'no white elephants' as the IOC's latest mantra, Kuopio, Finland recently lost out to Innsbruck, Austria in the voting to decide the host of the first winter Youth Olympic Games.  In response the Finnish bid team has claimed that its relatively low budget might have counted against it, even though it was only following the guidelines of the IOC to keep the event on a small scale.  This ongoing dilemma reflects the IOC's quandary over pandering to the heart or the mind.


fashion icon..... that look and feel

Designing the look and feel for a major sporting event is more than just a 'feel-good' factor.  The design of a bid book, the content of an award-winning pitch video does much to gain the support of both the sports fraternity and the host city itself.  Find empathy with an aspirational and emotive design, and the votes should go your way and the coffers will fill up quite quickly.

So against a sparkling snowy white landscape, Vancouver and resort Whistler have chosen a somewhat muted blue/green/gray colour scheme for the 2010 Olympic Games.  Following a prudent Games budget, VANOC has shown characteristic restraint in its branding strategy. 

Twenty-five textured patterns have been created by melding images such as ferns, leaves and city landscapes.  Graphics of ribbons in natural colours and patterns will weave their way through the city.  By design, dangling from the ribbons will be little icons such as lanterns; and umbrellas will sit on top of fire hydrants. 

But there may be a 'practical' aspect to this decision - as illustrated by Whistler where the town will work its 'look and feel' magic with a budget of only CAN$500,000 - no other city has come forward to challenge the Canadians should they not be ready to host the Games.

Look and learn future host cities!

home and away: money sharing schemes

In 2008, European Football (Soccer) Clubs that lent out their players to participate in European tournaments received fees from Uefa - football's European governing body.  And these payments - which were recently agreed as part of a deal to end a long-running dispute between the clubs and the governing bodies Fifa and Uefa - generated a tidy sum for some of the more successful clubs.  For example: German side Werder Bremen were the highest earners overall, taking in £935,107; while Arsenal - England's top recipients - earned a useful £732,760 for the efforts of players such as Spanish European Championship winner Cesc Fabregas.

The sums, calculated by Uefa provided a number of clubs with fees amounting to approximately £3,420 per player, per day.  Germany, Spain and England took the top three places in the revenue league table. 

And as the debate continues as to whether the sports and entertainment industries can weather the economic crisis better than other sectors, the English Football Association has taken the positive initiative of reducing ticket prices for Internationals to ensure that watching the national team is made as affordable as possible – particularly for families – during this difficult economic period. 
For example: in some cases the FA will expand the family enclosure at Wembley by upto 60 percent.  Ticket prices will be slashed and the new pricing structure will be particularly beneficial to members of the official supporters' club, englandfans, who may be eligible for additional discounts.
No doubt 'supply and demand' criteria will kick-in as teams around the world participate in World Cup qualifiers; and as the credit crunch continues to impact upon everyone's disposable income.
But in these dark days, England fans can only give thanks to the 'Fabio (Capello) Factor' which, for once, gives England fans a reason 'for living'   .... and splashing the cash!

sport culture:
a must for the season

ITV - the UK's original commercial channel - will not renew its contract to broadcast The Boat Race between universities Oxford and Cambridge after 2009, despite the fact that the event attracted a domestic audience of 7.6 million in 2008.

A part of the British culture, the Boat Race - which lasts just a few minutes as spectators line the banks of the River Thames - is a relatively expensive affair.   Cameras are located at strategic positions along the course and a bird's eye view for the TV viewers comes courtesy of two helicopters overhead.
The cost of the broadcasting rights for this event, which has kicked off The London Season since it first took place in 1829, has become prohibitive.  Advertising income for the channel has fallen significantly as a result of the credit crunch.  But the question is: who, if anyone, will someone take up the reins - or in this case grab the oars - of this very popular institution?
ITV Sport's award-winning coverage over the last three years has received critical acclaim from both event organizers and viewers; however, with hard times at the top of the agenda, this one-off event may find itself back in the hands of the BBC which owned the TV rights for an eighty year period prior to the ITV contract.

life after...   recession!  what recession?

The International Rugby Board (IRB) has decided to take a bullish position when it comes to financing the 2015 and 2019 Rugby World Cups - the showcase event for the sport.

Like many others - the Olympics and Paralympics and the Soccer World Cup, there has been a massive change in thinking as event owners recognize that a seven year period is insufficient time for a host city/country to plan/finance/host a world cup.  The latest strategy is to award the next 2 world cups on the same day.

In the case of the 2015 and 2019 Rugby World Cups, at least eight nations are showing interest in bidding... but there is a hitch.  The IRB are demanding a guaranteed euros 80 million for 2015 and euros 120 million for 2018 from bid applicants - although only the successful host country will have to pay up! (Note that the 2015 guarantee has recently been reduced from euros 100 million.) 

While the IRB retains all the revenues generated from sponsorship, corporate hospitality and TV rights - the host nation only has gate receipts to go towards the payment of the guarantee.  On the plus side, however, it should be remembered that France benefited from hosting the World Cup to the tune of an estimated euros 6 billion. Which begs the question: is the IRB's behaviour greedy or ambitious or unrealistic taking into account the current global economy?

The IRB are anxious to ensure that the successful bidders represent countries that play in the top tier of the sport.  But no suprises, with their pockets stuffed with cash, the likes of Russia and Dubai are snapping at the heels of the more traditional host nations
So the the real question is:  Who blinks first?