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A Stateside Action Plan for Liverpool

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The words "Liverpool Football Club" are in the center of a pennant, with flames either side. The words "You'll Never Walk Alone" adorn the top of the emblem in a green design, "EST 1892" is at the bottom.

New England Sports Ventures can generate substantial revenue from Liverpool in the United States by: 

1) hosting an annual or biennial American tour 

2) syndicating Liverpool matches to regional sports networks (RSN)

The American public has demonstrated a substantial interest in international soccer matches.  This past summer alone, Manchester United averaged 55,790 for three matches  in the US, Real Madrid averaged 68,236 in two matches and the Barclay’s New York Challenge averaged 19,042 over three match dates; total attendance for these 8 matches, 360,968.  To put this number into perspective, the Oakland Raiders drew 354,276 for their eight home games in 2009.

It could be argued that these attendance numbers were the manifestation of interest from this year’s World Cup, and are not sustainable in long-term; however, the CAA run World Football Challenge of 2009 drew 336,813 fans over six matches, and two FC Barcelona matches drew 159,967.  The combined attendance of 496,780 for these two tours was more than six NFL clubs in 2009.  The substantial gate receipts generated from these international friendlies has been adversely affected by fees imposed by the United States Soccer Federation. 

Currently, the USSF taxes match promoters 5.25-15% for matches held on US soil featuring international teams.  If we assume that a match selling 60,000 tickets generates somewhere in the neighborhood of $2.7 million in gross ticket sales (based on an average ticket price of $45), the USSF’s tax can serve as a significant deterrent to those considering the feasibility of promoting international matches.  The probable repeal of USSF’s sanctioning fee will increase the viability of these tournaments.  

Moreover, MLB stadiums could be the preferred venues for a Liverpool tour. Matches delivered to municipally owned stadiums  could serve to enhance the political leverage of New England Sports Ventures with its fellow owners.   Furthermore, market selection could be a driving force to forge partnerships with team owned RSNs.

In last week’s SportsBusiness Journal, Ted Leonsis made the argument that more and more clubs will be looking to launch their own RSN.  He pointed out that in the coming years broadband and mobile distribution rights will become increasingly important.  Thus, the question arises, how will these networks fill the vast amount of programming requirements for a multiple platform presence?  The YES Network may have given an indication where RSNs will look to acquire programming.

The YES Network recently agreed to terms with Arsenal to broadcast their EPL, FA Cup and UEFA Cup matches in HD.  John Filippelli, President, production and programming for the YES Network had this to say about the agreement:

“This Arsenal package provides additional depth to our already diverse, Emmy Award-winning lineup. It not only makes our programming more attractive to those living in our traditional regional viewing area, but it also enhances the value of our YES national feed available throughout the country.  Those tuning in to our YES national feed will benefit from these Arsenal programs airing in HD throughout our schedule, including when our Yankees and Nets game telecasts are blacked out.”

New England Sports Ventures would first utilize Liverpool rights to increase its subscription fees with New England based MSO’s, and then build the business case for Liverpool being a valuable asset for RSNs outside of the Northeast.

New England Sports Ventures has demonstrated innovation and efficiency in every endeavor it has embarked upon; I eagerly await their stateside plans for Liverpool.

Written by Peter Amador

October 20, 2010 at 9:43 PM

Posted in EPL, TV Rights

Tagged with , , , ,

A Marketing Solution Offered by Tottenham

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Did the EPL club Tottenham Hotspur revolutionize European soccer sponsorship?  I will argue in favor of this proposition.  Furthermore, I will contend that the Spurs decision to separate its kit sponsorship into league and cup components  – while a strategically sound business decision on their part – demonstrates the ability of clubs to create customized solutions for current and future business partners.

When Tottenham signed Investec to a two-year, £5 million jersey sponsorship agreement for cup competitions, the club increased its jersey sponsorship by 25%.  An achievement which validated the team’s decision to pursue multiple jersey sponsors, but did not help the club surpass Chelsea in terms of jersey sponsorship revenue.  However, I believe we can all agree that in terms of prestige, the North London club is a notch below their counterparts in the West.  Therefore, the 10% gap in jersey sponsorship is more of an affront to Chelsea than the Spurs.  Moreover, the Spurs decision to pursue two-year contracts should not be discounted.  I believe it is indicative of the club’s long-term business interests.

The Spurs have held informal talks with London’s, Olympic Park Legacy Company about making a bid for Stratford Stadium following the 2012 Olympics. The club’s marketability would increase exponentially with a move to Stratford Stadium.  Upon moving to Stratford Stadium, the team could continue having multiple jersey sponsors, tie their stadium naming rights to a jersey sponsorship (unlikely because of the cautionary tale which is Arsenal’s deal with Emirates Airlines), or have a primary jersey sponsor and a separate stadium naming rights partner.  The course of action which the Spurs choose to embark upon will determine if the club can develop a brand with assets which are beneficial to its partners.

A sponsorship’s effectiveness is measured in a brand’s ability utilize a property’s image and trademarks to drive its business objectives.  Thus, we must examine the business objective of Autonomy (league play) and Investec (cup play).

Autonomy, with a market cap of $6 billion, has the resources to spend to spend an extra £2.5 million to procure the rights for cup play.  Their decision to only secure the rights for league play must be driven by a company focus.

Autonomy is a b2b software infrastructure company.  Consequently, hospitality packages are an important component of any sponsorship which they enter, and the Spurs’ North London location appealed to their interest.  Moreover, EPL matches which are broadcasted in Asia during primetime, are more important to their business interests than Champions League matches; which reach a greater percentage of European countries – where the company’s strength is – but are broadcasted in the middle of the night in Asia.  Conversely, the Champions League format coincides with the business interest of the Spurs’ cup partner.

Investec is an international specialist bank and asset manager based in South Africa, where the Spurs brand is strong due to a 2003 tour and win in a South African international tournament.  Investec caters to a select client base, and focuses its interest on countries of Anglo-Saxon origin.  Having a select clientele, hospitality was a major consideration in the firm’s sponsorship evaluation.  Furthermore, an emphasis on cup play enables the company to expand its footprint in European markets.

The Spurs decision to have multiple jersey sponsors is indicative of a growing trend amongst professional sports franchises to offer specialized marketing solutions to their partners.  It is incumbent upon sports properties to demonstrate that they understand the business objectives of their partners.  The properties that place their partners objectives at the forefront of a sponsorship will have the most success in this decade.

Written by Peter Amador

August 26, 2010 at 8:28 PM

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