Hollis Sponsorship Bulletin

With the debate over the pros and cons of alcohol sponsorship rarely out of the industry and mainstream news, the European Sponsorship Association (ESA) continues to take an active role in consulting with and representing the industry at local and European government level. It has recently reported the findings of its large-scale survey of rights holders to the EC, and the industry is now awaiting to hear in the autumn from the Director General for Health and Consumers, who has been taking evidence and consulting on all sides of the debate.

The big question, of course, is whether the issues of alcohol sponsorship and binge drinking are inter-related, and whether the industry can survive calls for external regulation. Is it facing European-wide legislative control, as happened with tobacco marketing, or will responsible marketing, codes of practice and co-operation with local governments ensure its survival?

Last year, the beer sector contributed some US$565m to the total global sponsorship investment pot, ranking it the fourth highest sponsoring industry in terms of investment (source, TWSM). Indeed, the beer brand, Budweiser was ranked the fifth largest sponsor in sponsorship commitment, pouring a reported US$131,250,000 investment into its sponsored activities. This positioned it above brands including BP, Emirates, Sony and O2.

Unsurprisingly, with sponsorship investments of these proportions, the alcohol industry has been keen to protect its position and investments. At a time when latest figures show that 24% of adults in England are classified hazardous drinkers and the cost of alcohol related harm to the NHS is £2.7 million, brands have taken significant voluntary steps to promote responsible drinking, and in some instances, to use their sponsorships as a vehicle for conveying messages of sensible drinking.

For example, for any new football team sponsorship deals, alcohol branding on children’s replica shirts is now not allowed by the drinks body, The Portman Group. Indeed, some brands were a step ahead of the timing of such prohibitions, with Carling, sponsor of both Celtic and Rangers offering children’s replica shirts without branding before the restrictions were implemented.

Alcohol brands have also been active in joining with the UK Government on social sponsorship campaigns. For example, the UK Dept of Transport’s THINK! campaign joined with Bacardi Martini, to support the brand’s PR link, using Michael Schumacher as an ambassador, with a joint promotion of responsible drinking at Grand Prix.

Elsewhere, Carlsberg was seen to use its UEFA football sponsorship to convey a responsible drinking message: ‘Carlsberg supports fair play on and off the pitch. Please drink responsibly’ within stadia and on fan park cups. Tennants, the owners of the T in the Park music festival, gives half of its signage free to the Drinkaware Trust, as part of their social responsibility programme.

But will these voluntary steps be enough to stave off legislative intervention? The EC is looking very closely at the issue through its Alcohol and Health Forum, the objectives of which include the creation of an action plan to protect children and young people, investigation into scientific evidence, and to consider self-regulation as a means to increase responsible commercial alcohol communication and sales.

As part of ESA’s commitment to the Forum, and in conjunction with Comperio Research, its wide-reaching survey of European rights-holders was conducted to gain insight into practice and attitudes towards alcohol sponsorship. ESA was keen to discover the extent to which rights holders hold concerns over alcohol sponsorship, together with the extent of any measures, voluntary or otherwise, in place to regulate such activity and protect these important revenue streams.

The results clearly indicate that many rights holders have their own internal procedures to set the nature and extent of their partnerships with alcohol brands, and do not wish for additional legislative control. Many assess alcohol sponsorship on a case-by-case basis, with some banning it along the lines of unsuitability or the target age of their audience.

The majority of respondents indicated that they would prefer to self-regulate their partnerships under guidelines by an industry body, such as the European Sponsorship Association, rather than an external body unrelated to the marketing sector or through legislation.

Restrictions on alcohol sponsorship, or more critically, a blanket ban would see many rights-holders struggle to fill the void left by alcohol brands’ investments. Indeed, around half of the organisations surveyed, said they would be affected if legal restrictions were imposed upon alcohol sponsorships; significantly more for those with current alcohol sponsorship deals.

As Jennifer Davies, Development Director of the Philharmonia Orchestra puts it: “For UK arts organisations that are experiencing diminishing subsidy and a critical reliance on a limited pool of private donors, alcohol sponsorships can make the difference between a successful fundraising campaign, or one that does not cover its costs. And private fundraising is key to an arts organisation’s survival.”

So, what does the future hold for alcohol sponsorship? Can the drinks brands and the rights-holders who rely upon their support, steer a mutually responsible path to ensure its survival free of legislative control? Will the current approach of the EC, which is encouraging self-regulation to see if this helps address the problem, prevail, or will national governments decide to impose their own legislative restrictions?

The industry, in particular the rights holders, as well as the sponsors themselves, need to be vigilant in ensuring that alcohol sponsorships are professionally managed. Not only must they guarantee that no promotions are made to under 18 year olds and that all advertising, giveaways, sales and hospitality are managed to the highest level of control, but they must also take positive steps to promote responsible drinking. Abiding by voluntary codes of practice and imposing their own self-regulations, and by managing events so that there are no alcohol-related incidents, is the best way that the industry can demonstrate their awareness of the issue and their responsibility towards it.

Helen Day, Head of European Policy, ESA

[1] Statistics on Alcohol, England, 2009, The Health and Social Care Information Centre

For further information, or to find out more about ESA’s Policy Group, please contact ESA via office@sponsorship.org or telephone +44 (0) 208 390 3311, or contact Helen Day at helenday@sponsorship.org

Havas Sports & Entertainment is reorganising its UK business in a bid to raise its profile and expand its offer to clients. From July 1, the company will align sports marketing consultant Havas Sports more closely with brand entertainment specialist Cake. As a result, HS&E says it will be able to offer brands “a fully integrated approach”.

Between them, the companies in question can offer a wide range of specialised event-based services such as strategic consulting and planning, activation,  rights management and measurement. Commenting on the news, Havas Sports’ Keith Impey said, “It’s great news to have access to the complimentary skills offered by the Cake team. It obviously makes more sense to clients for us to be able to front experts in all event-based projects - not just in sports.”
Cake has built a strong reputation in PR, social media, experiential and content creation for a clients such as Motorola, Sainsbury’s and Carling. According to Cake’s Mike Mathieson: “This is a really exciting development for us, particularly as we head towards the 2012 Olympics.”

Both companies will retain their independence and clients but collaborate as the opportunity arises. HS&E president Lucien Boyer said: “We understand what brands are looking for and have a team of 90 in London with expertise in strategic consultancy, research and evaluation, activation, experiential, digital, social media, creative, events and PR.”

High street retailer Currys is the new sponsor of Sky One juggernaut The Simpsons. The electronics chain takes over from  Domino’s Pizza - which sponsored the show for a decade before deciding to pull out earlier this year.

Curry’s is hoping to inject some humour into its marketing communications through the new sponsorship - which started at the weekend. The agency responsible for achieving this is M&C Saatchi - which will create sponsorship break bumpers and online branded content.

The sponsorship is part of a multi-platform marketing strategy backed by the tagline We Can Help. The idea of the campaign will be to show how Currys can provide everyday solutions to problems associated with electrical goods. Commenting on the sponsorship, Currys marketing director Anna Burleigh said it “gives us a platform to bring to life our broad range of services in a humorous way.”

The Brit Oval has agreed a ten year extension to its sponsorship deal with international facilities services group OCS. Under the terms of the deal, OCS will continue to have naming rights to the venue’s flagship stand until 2019.

 In addition to the stand sponsorship, OCS supports Surrey Cricket and the local community by sponsoring the final of a competition called Chance to Shine. Organised by cricket clubs and primary schools across the county, Chance to Shine aims to create sustainable cricket cultures in schools. 

The company also hosts the annual OCS Young Sportsperson of the Year awards at the Brit Oval, a ceremony which honours excellence in sport among young girls and boys. Since the awards began in 1998, over £200,000 has been granted to young sports stars, including Beijing Olympic Gold Medalist gymnast Louis Smith.

 The OCS Stand is regarded as one of the finest places in the world from which to watch cricket. Commenting on the deal, OCS chief executive Chris Cracknell said, “Not only does this sponsorship give our brand key exposure to audiences across the world, the partnership underpins our objective of putting something back into communities in which we work and supporting young people via sport.”

Separately, Scottish Rugby is extending its long-running partnership with The Famous Grouse for two years more years. Commenting on what is believed to be a six-figure deal, The Famous Grouse director Gerry O’Donnell said: “The Famous Grouse has been with Scottish Rugby since 1990. Our sponsorship of the national team through until 2007 earned The Famous Grouse the title of the longest-running national team sponsorship in the world of rugby.”

Having virtually ruled out a title sponsorship deal with Brawn GP, there are reports that Richard Branson’s Virgin may choose to sponsor the Manor F1 team - which debuts on the circuit from next year. Manor is already established on circuits such as F3 - but the move into F1 would greatly increase its international exposure. Virgin will be hoping Manor might have the same immediate impact as Brawn.

Meanwhile, the threat of an F1 breakaway appears to have receded following a meeting between FIA president Max Mosley and the eight rebel teams. Although the two sides seem to have different versions of how the meeting went, the upshot is agreement over matters such as budget caps and governance of the sport. For sponsors, the compromise is good news - since a split in F1 would have destroyed one  of the sports sector’s key communications platforms.

There are reports that Liverpool FC is poised to end its long-running shirt sponsorship with lager brand Carlsberg. Despite a 17-year unbroken partnership, the issue of price seems to have driven a wedge between the two sides. Liverpool is seeking a deal similar in scale to that of Manchester United - which has just bagged a £20 million a year deal with US insurance giant Aon. However Carlsberg doesn’t want to pay much more than £10 million a year.

It’s hard to see how Carlsberg could justify a £20 million a year investment in Liverpool - particularly given the restrictions that exists with regard to drinks brands. Possibly a compromise solution would see Carlsberg retained as the club’s official drinks partner - as long as this doesn’t undermine the negotiations for the main title sponsor.

A similar situation has arisen at Chelsea. Current sponsor Samsung pays around £10 million a year but Chelsea believes it should be commanding around double that.

Meanwhile, championship side Swansea City has signed a two-year sponsorship deal with gaming brand 32Red.com, the biggest in its history. The deal will see the 32Red logo placed on home and away shirts - while the brand will also become the club’s official online gaming partner.

The Guardian Newspaper has signed a sponsorship deal with VisitEngland which will see it promote UK-based activities in the run up to this year’s summer holidays. 

Echoing similar Guardian initiatives in recent years, the paper will print a run of supplements sponsored by VisitEngland. There will also be a microsite, podcasts, video - and a link to twitter feeds from various cities.

For VisitEngland, the goal is to offer families some close-to-home alternatives to holidaying abroad. With the Euro still fairly strong against the pound and the recession some way from ending, now is viewed as the ideal time to remind Brits of what delights they have on their doorstep.

In another twist to the power struggle that threatens to send Formula One spinning out of control, FIA president Max Mosley has strongly denied claims that he has lost control of motorsport. Responding to a rush of stories in the international media, he denied that he had been forced out of office following a showdown with the rebel F1 teams. He also left open the possibility that he might stand for re-election to his current post in October 2009. 

F1 sources don’t seem to be taking his threat too seriously. But it has to be remembered that Mosley has a powerbase which stretches far beyond F1. With FIA representatives in 122 countries, the risk now is that Mosley’s loyal supporters around the world will react adversely to the way the eight rebel teams have tried to force the FIA’s hand. That could reignite the dispute which has threatened to engulf the F1 circuit in the last week. Without clarification, this is a controversy which could rumble on right through until the October elections.

In the end, it couldn’t have turned out any other way. After the threat of a team-led breakway from Formula One, Max Mosley - the controversial head of motor racing governing body the FIA - is quitting his executive role.

Mosley’s decision to step back from his executive function came at a meeting in Paris involving the eight rebel teams and F1 commercial chief Bernie Ecclestone. As a result, the teams which had planned to form a rival circuit are now expected to line up for F1 again next season.

The news will come as a relief to sponsors - who were faced with the prospect of F1 being torn apart at the seams. That would have made strategic planning around top flight sport virtually impossible. It would also have led to a mass of litigation between various overlapping vested interests. 

As it is, Mosley no longer has any say over F1 and will not stand for re-election as FIA president in October. However his departure does not necessarily mean that F1 is set for a period of calm. It remains to be seen what will happen to the budget caps that Mosley wanted to impose on teams. There is also likely to be a tough debate between Ecclestone and the rebel F1 teams over how to share power and money in the post-Mosley era.

The world of sports sponsorship is dominated this week by developments surrounding motor racing circuit Formula One. With eight leading teams (Ferrari, McLaren, Renault, Toyota, BMW Sauber, Brawn GP, Red Bull Racing and Toro Rosso) threatening to launch a rival circuit from next season, hundreds of brands ranging from main team sponsors to official suppliers will be watching like hawks.

It is not easy to predict how things will unfold in the coming months. Look at the above names and you can see that there is enough commercial muscle behind the eight breakaway teams to create a rival franchise. But that doesn’t mean a) it will happen or b) that it would be successful.

Looking at a) first. There is a school of thought that the manufacturers will stay with the circuit if Max Mosley, head of motor sports governing body the FIA, quits. It is Mosley’s desire to impose radical rule changes which has led to the current controversy. If he goes, then the teams could return to the fold with someone more sympathetic to their cause at the heart of the decision-making process.

Mosley is not required to leave his post. But the strength of feeling among the rebel F1 teams may persuade him that now is the time to step down. With many F1 fans backing the breakaway teams, the pressure on him must be intense.

If Mosley does move on, then no serious harm will be done to F1 in the short-term. F1 commercial chief Bernie Ecclestone would probably have to cede more control to the teams - but the brand would stay intact. This in turn would probably mean business as usual for sponsors. Longer term, there would be question marks over the teams’ ability to run the circuit - but there would at least be breathing space for sponsors to consider the merits of continued investment.

Far more problematic is if Mosley stays and the teams go. Ecclestone has already said that a breakaway would be a disaster - and he has probably never spoken a truer word. For a start, it would result in a barrage of lawsuits. Aside from contractual commitments within F1 itself, you’d have venues, equipment suppliers, broadcasters and sponsors all demanding some kind of remedy. So even if F1 were capable of replacing the missing teams, it would be dragged into a mess of litigation that would probably kill it off.

The eight breakaway teams would also have a legal nightmare on their hands. And on top of this they’d have to secure circuits, line up broadcast deals, promote their new brand to fans and convince sponsors that they were value for money. That sounds like a 5-10 year project at least.

Which all brings us back to Max. Mosley is not one to duck a challenge - as he has shown on a number of occasions. And he won’t like the idea of the entire FIA family being dictated to by the power players in F1. But if he doesn’t go, motorsports could become a very tricky area for brands.

Still in F1, Virgin chief Richard Branson has said that a title sponsorship with Brawn GP looked increasingly unlikely. Virgin had been in pole position to secure a deal from 2010 - until the team’s remarkable run of success. Now it looks as though the price tag will be too high. Speaking to BBC Radio 5, Branson said: “Brawn’s value has gone from next to nothing to £50 million a year. I suspect, next year, the price will be astronomical and we may have to look somewhere else with a smaller team.”