REASONS TO BE CHEERFUL

The world has been a difficult and challenging place in the past twelve months as COVID-19 has wreaked its terrible havoc on people’s lives and businesses. 

The world of sports and entertainment has been particularly hard hit by the crisis, with thousands of events cancelled and many people losing their jobs. The return of some televised sport has been warmly welcomed, but without fans it’s not the same. However, there is light at the end of this long tunnel in the form of a mass vaccination programme which, in the UK at least, is well on its way and will see a return to normality in the foreseeable future with full stadiums, venues, and festivals.

As Vera Lynn used to say - “don’t know where, don’t know when”, but what we can be certain of is that when live sport and entertainment returns, demand from the fans will be off the scale, having missed it so dearly. 

The sports and entertainment marketing industry has taken a real kicking as the fulfilment of contracts has been all but impossible to deliver for many rights owners, resulting in the extension of contracts to deliver rights, “make good” of other assets such as additional digital and content rights and, in some cases, cash being returned to sponsors.

It has also been tough to secure new deals as many sponsors have sat on their hands, keen to get involved but reluctant to commit to sports and entertainment events and teams without the certainty of spectators.

This has shone a bright light on the precarious position of rights owners who have been over-reliant on selling experiences, having neglected building their owned and operated audiences in media. Our long held view is that the convergence of sponsorship and media is absolutely critical, and must be embraced by both rights owners and their sponsors. The sum of these two parts is greater than their whole. Without media, your audience reach is severely limited and without the stardust of the content that sport and entertainment gives, what do you have to say? Let’s be honest, many brands aren’t that interesting, so they’re in dire need to tell their brand story in a compelling way. The content garnered from sports and entertainment partnerships provide them with an interesting narrative through which to present their products and services to their target consumer. This is the exciting and entertaining content that fans want to see.

 

This is important to understand whether you’re a brand or a rights owner. As we have witnessed, rights owners without a television audience have suffered the most, as so much of their revenue is from spectators and participants and what they sell to sponsors is access to that audience. COVID-19 has forced rights owners to rethink their business models and to explore what’s possible through the utilisation of their digital channels to create virtual experiences.  

For brands as a whole, lockdown has been a mixed bag. For many, the impact on sales has been seismic. In our discussions with some of our clients, sales are down by over 50%, but there are others that have seen significant growth and invested marketing budget to fuel that growth. We’ve seen success across tech, media, grocery retail, the disruptor brands of established sectors such as FinTech and the likes of online used car retailers like Cazoo and Cinch. Many of these brands are using sponsorship as a platform to raise brand awareness and to take a bigger slice of these fast growing sectors.

There are reasons to be positive. Global economic growth is forecasted to grow this year 5.5% according to the IMF, with the UK growing by 4.6%. Given that Q1 2021 was down by 4-5%, this implies the rest of the year will grow 8-9%.   

Also, the European Sponsorship Association’s Sponsorship Sentiment Tracker, which gauges the health and confidence of leading sponsorship organisations across Europe since the start of the pandemic, has seen positive sentiment rise with a score of only 5.5 out of 10 at the start of the pandemic to the latest giddy heights of 7.1 among brand marketers.  

Our business has grown every year since its launch at the end of 2016 and we have been fortunate to have worked with 33 clients since our launch, to whom we hold a huge debt of gratitude in believing in what we do and valuing our contribution to their business. But we knew we could not be complacent, so during the doom we all felt last year we decided to double down our investment in our business.

We set up a sports rights sales business as we saw rights owners increasingly look to high-quality external support as they deal with the double whammy of leaner commercial teams, but with more pressure than ever to increase revenues. We have offered a cost effective solution and a different way to present a rights owner's proposition in a language that will resonate with brands and we have been successful winning new clients, including Rugby League World Cup 2021, Valencia CF, Extreme E and RCD Espanyol.

Our consultancy business has also flourished with new assignments from the Movember Foundation, Facebook, HRA Pharma and OneFootball to name a few. 

We have invested more in insight, data and tech to support the work we do for our clients. For example, using analysis of social media to fundamentally redefine how organisations understand and engage their customers and fans, and to help with sponsorship valuation and campaign activation. 

 

We have also invested in our marketing and new business efforts with a refinement of our proposition, a refresh of our brand identity and a shiny new website.

In summary, we should all be optimistic for the future. Let’s be honest, it’s hard to imagine it being any worse. Sport and entertainment will return to be front and centre of our lives and an exciting and dynamic place to be for brands who want to stand out and give something back to the fans and their customers. Done well they will be richly rewarded.