Jim O’Toole: Navigating a commercial course
Sailing sponsorship is a complex business, with a multitude of events and a wide variety of rights and rights holders. Writing exclusively for SportsPro in the September 2012 edition of the magazine, former World Match Racing Tour chief executive Jim O’Toole outlines the myriad options available to would-be sponsors – and the potential pitfalls that await.
A chief executive enjoys a day’s corporate sailing and tells his marketing team: “Find me a sponsorship in sailing, it’s a great sport that reaches our customers!” The immediate challenge for marketers is where to begin and the answer is usually based on the advice of a friend of a friend who works in the sport or an agency that once did some sailing work.
Monohulls, catamarans or trimarans? Dinghies, maxis or minis? Inshore, offshore or stadium racing? Men’s, women’s, round the world or an Olympic campaign? Create an event or buy a hospitality package? The list of opportunities is long and complex.
Given the fragmented nature of the sport, the sailing sponsorship market is difficult to quantify but a conservative estimate of US$750 million to US$1 billion would cover the multitude of deals done and campaigns managed globally.
This estimate covers sponsorship by brands, host cities and nations and covers the full spectrum of title to team to venue to individual deals.
At one end of the spectrum is the much-quoted US$350 million plus that Larry Ellison of Oracle Racing is spending on his defence of the 34th edition of the America’s Cup; add to that the spend by sponsors of the challenger teams such as Emirates Team New Zealand, who have major deals with Nespresso, Omega, Toyota and Camper, and the Cup is clearly at the very pinnacle of not only the sport but the sailing sponsorship table.
At the other end is the recent ISAF Youth World Championships held in Ireland and presented by a local Irish pizza operation Four Star. The sport’s global governing body, ISAF, sanctions more than 140 world championships from events for kids to events for kings.
"The sailing sponsorship market is difficult to quantify but a conservative estimate of US$750 million to US$1 billion would cover the multitude of deals done and campaigns managed globally"
Other major events such as the Volvo Ocean Race attract significant spend on individual team sponsorships where a team’s operating budget can exceed US$25m per cycle, and to a lesser degree at global event level, given the dominance of Volvo as event owner.
More regular professional sailing series such as the Alpari World Match Racing Tour and the Extreme Sailing Series work on differing business models with host city funding and local event sponsors but also attract tour-level sponsor brands such as Lotus Cars, Garrard, GAC Logistics and Oman Air.
Specialist adventure events tend generally to originate from France with their particular passion for long-distance odyssey events, such as the Vendée Globe, the Route Du Rhum and La Solitaire du Figaro, resulting in a high level of investment of French brands such as Groupama, Banque Populaire and Veolia. As ever in the sports marketing world one key questions applies: where, as a brand interested in the sport, do you find the right deal in a clutter of properties? In most major sports there are multiple sources of experienced, informed and independent consultancy advice on how the sport works, what projects deliver and the scope for creating new properties to a client brief.
Sailing tends to be led by a team or an organiser’s time-specific funding requirement rather than longer-term strategic thinking.
Some sports marketing agencies have all-purpose sailing divisions which do everything from PR to event activation to hospitality management, but few have the strategic resource to provide broad-based independent analysis of what is a very complicated scenario.
Most sponsors’ selection processes focus on geography, brand exposure, media coverage, audience connectivity, hospitality options and ability to deliver activation platforms.
Part of the attraction of sailing is the access to an affluent, hard-to-reach audience. The sport has a long track record in categories such as automotive: BMW, Audi, Porsche, Lotus and Toyota are five current or recent examples of manufacturers who see the sailing audience as their target.
"Part of the attraction of sailing is the access to an affluent, hard-to-reach audience"
Consistent sponsorship by watch brands such as Rolex, Omega, and Corum further reflects the fit with the upscale audience. In broad brush strokes the sport delivers a male biased, 25-55, upscale audience with higher than normal disposable income.
This varies dramatically in key emerging markets such as China, India and Russia where wealth – and available time – come at an earlier age.
In terms of geography, despite the success of the sport’s development programmes and hosting of major events in Asia and the Middle East, its core DNA is largely Anglo-Saxon, with Britain, Australia, USA and New Zealand providing many of the stars of sailing, followed by Spain, Italy and Scandinavia.
Prising rights fees from broadcasters has traditionally been a challenge for sailing properties, with most events or rights holders relying on the tried and tested model of creating their own independent production for free distribution to broadcast outlets.
One advantage that sailing has is that despite most broadcasters having allocated their rights budgets to big ticket, must have sports such as soccer, many still need to fill airtime with other content. This does however result in increased demand from broadcasters on quality of production and increasingly HD rather than SD output.
"In the absence of live coverage on a major broadcast platform, the secret of connecting with the sailing audience is creating digital content which can be viewed at a time and a place and on a device of the fan’s choosing"
The sophistication of the sailing audience is such that depending on a late-night spot for a 26-minute highlights show will not deliver and most rights holders have invested in a toolkit of television outputs, from pre-event promotional videos, daily video news release content, live IPTV coverage and the ultimate goal, live television coverage.
In the absence of live coverage on a major broadcast platform, the secret of connecting with the sailing audience is creating digital content which can be viewed at a time and a place and on a device of the fan’s choosing.
A consistent YouTube channel, broader digital content downloads, live streaming and a strong social media output are crucial elements in a sailing media toolkit, all of which need to work hard for both sponsor and event owner.
Two upcoming milestones will illustrate the health of the sailing sponsorship market: the next Volvo Ocean Race with its new one-design business model; how many more teams can they attract at US$25 million?
The 35th edition of the America’s Cup will take place in 2015/6. With Team Sky’s first-ever British win in the Tour de France, the America’s Cup remains one of the few iconic global sporting events never to have been won by a British team. Britain’s got plenty of sailing talent but can that talent attract sponsors to make up a budget of US$200 million? The sport is in excellent health and offers a robust marketing platform, but that may be a step too far for the UK market.
Jim O’Toole is the former chief executive of the World Match Racing Tour He runs www.sponsorsailing.com, an independent sailing sponsorship consulting service.