Naming Rights

The World of Sports Sponsorship

In the professional era, sponsorship has become indispensable. Without it players’ wages just could not be paid, for the gate money at even major events will nowhere near cover the cost. Indeed, the audience paying at the gate is dwindling as TV coverage improves, so the TV companies themselves become among the most important sponsors.

But what does a sponsor get in return for being an official tyre or supermarket? Some associations are more obvious – a team playing an away match needs hotel accommodation and stays at the official hotel chain – and some less so. Does Johnathan Thurston really need to pop into a hardware store during the interval? Is he rebuilding the sheds? Of course not. For Home, this is part public awareness, part branding exercise and part image-building.

Tough sports attract sponsors who like their products to be seen as tough. If you prefer AFL, you’ll likely prefer to shop at Bunnings which is that code’s “official partner”, stay at Holiday Inn, drink Treasury Wine Estates’ vintages (although Carlton Draught is the “major partner”, trumping the ‘official’ ones) and eat Four ‘n’ Twenty pies followed by a Cadbury’s chocolate bar.

Take the carmakers, for example. Holden and Toyota spend a lot of their time burning rubber to chase each other on race tracks but they also compete on the pitch. As market leader Toyota (which sponsored the code from 2008 to 2012) abruptly turned off to enter AFL for 2013, Holden screeched into the vacated parking bay at NRL and took over as a major rugby league sponsor, with naming rights to the State of Origin series, the Kangaroos national squad and the Under 20s competition. “We are very excited about this partnership. It’s exactly what the Holden brand needs to cement our success this year, and into the future,” said chairman and managing director of Holden Mike Devereux at the launch of the venture.

Under the deal, Origin will now be known as the Holden State of Origin Series, the national side will be called the Holden Kangaroos and the Under 20s competition will be renamed the Holden Cup. Holden will also be the major sponsor of prizes for the game’s annual Monster Raffle, which has raised more than $2 million for grassroots clubs across Australia.

The three-year multi-million-dollar deal is Holden’s first football sponsorship in fifteen years and believed to be worth more than twice as much as it spends on V8 Supercars. Holden is understood to have bid $10 million over three years to become the official automotive partner of the NRL, compared to an estimated $20 million in 2012-2014 being spent by Toyota to sponsor the AFL. “This is such an exciting time for rugby league. We have in place a strong foundation for growth and there are tremendous opportunities ahead for everyone in the game, including our corporate partners,” said NRL Interim Chief Executive Shane Mattiske. “It’s significant that rugby league now has two of the biggest and most respected brands in Australia, Telstra and Holden, as its two biggest corporate partners in a sponsor family that supports all levels of the game. The opportunity to develop strategic partnerships with people and organisations who share rugby league’s breadth of community involvement is an important part of our vision for the game and in Holden we have a partner who embodies that commitment. This is a real partnership that works across the game and it is one that all fans can get behind.”

As fans will know, the money being talked about here is chickenfeed compared to what the TV boys are fronting up. In 2012 State of Origin Three was the highest rated programme nationally, with 4.03 million viewers (NRL figures), which highlights why Nine Network paid a cash component of $925 million, $90 million of which will be paid prior to the start of the first season, plus advertising packages to the value of $100 million, for five years’ rights to the world’s premier rugby league competition.

But listen to Australian Rugby League Commission Chairman, Mr John Grant: “I think the entire game is entitled to feel proud of what has been achieved. It is a great tribute to the players and the clubs and the important thing now is to maximise the opportunities we now have for the future. The cash that comes from the agreement, used wisely, will provide the funding base for sustainably growing our game from the grass-roots to the elite levels.”

Grant is aware of the absolutely crucial need to cement a sponsorship deal by making it work. Signing the deal is only the start, not the culmination, and the team / sport / individual must work as hard as possible to bring success – indeed, many sportsmen and women still ‘resent’ the intrusion of the sponsor into their private or professional space, but more nowadays recognise that without them, they wouldn’t be in the running at all.

On the corporate side, a sponsor that simply signs a cheque and sits back is wasting its (or its shareholders’) money and passing up a great opportunity to leverage the chosen sport’s image (such as the grace of gymnastics, or the ‘clean’ image of youth sport) to provide the ‘halo effect’ in the public eye. Sports sponsorship, especially further down the chain at local or regional level, is wonderful for corporate social responsibility too, and can help the sponsor get its name out into the community in a positive light.

For while there are relatively few companies willing to shell out for multi-million dollar deals, many more derive just as much benefit in their community with much more modest means. Local clubs or athletes often work harder at making the partnership more effective for, as the AFL says, “value must be given and received by both sides.” Sponsors no longer accept any club or organisation approaching them without something being given in return. As there are hundreds of groups searching for sponsorship monies, there is an incredible variety of sponsorship requests for potential sponsors to consider.

“The chances of securing sponsorship will be much better if a proposal is prepared and presented in a professional manner,” says the AFL on its Community Club website. “Generally a club will be seeking funding for equipment or specific goods and resources. In return, the sponsor will expect to obtain company or brand name exposure which enhances their name and encourages people to buy their products. As the money a company invests on sponsorship often comes from its advertising or public relations budget, be prepared to argue that $1,000 spent putting a company logo on your club jumper is a better investment than money spent on advertising in the local paper, on radio or on television.”

Occasionally a company may be offered the chance to partner in something new and challenging, with attendant risks and rewards. A case in point is progressing at a remarkable rate in Southeast Asia, where rugby league is being officially launched in – of all places – Thailand. A small number of companies with interests in that region as well as back home have been approached to help pioneer this new departure. Their outlay will be a fraction of that required for the NRL but the exposure – especially during the critical inaugural season in 2014 both up there and down here – will be totally disproportionate to what they will be spending.

So don’t automatically slam the door on sponsorship requests. For large or small companies aiming at business-to-business or consumer audiences, they often work – providing you know what you want to achieve and then work hard to make it work for you.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 16, 2018, 6:41 AM AEDT