Playing hardball for the corporate dollar

With the state’s two AFL teams continuing to attract blanket media coverage, and the rise and rise of football’s global codes, soccer and rugby, competition for Perth’s sponsorship dollar has never been stronger.

Western Australia’s sponsorship market is worth up to $25 million, with the state’s sporting mainstays, the West Coast Eagles and Fremantle Dockers, leading the way with annual sponsorship budgets of $6.7 million and $5.8 million respectively.

Also, newcomer Super 14 rugby team the Western Force managed to sign 17 sponsors and generate sponsorship reported to be up to $4.5 million in its inaugural season, despite a losing on-field record.

Such a heavy financial commitment from Perth’s relatively small corporate market would appear to be a big ask.

However, Fremantle Dockers sponsorship manager Darren Beasley told WA Business News his club’s 2006 budget had grown by $1 million during the previous year.

“We are seeking to build commercial relationships and engage businesses prepared to offer support in other areas beyond the terms of the sponsorship deal,” Mr Beasley said.

“You need to pursue a marketing angle rather than just sales, and through our product we are able to transcend all mediums to bring a company’s goods and services to the public eye.”

The Western Force has been able to tap into external markets as part of its sponsorship program, with rapidly expanding Dubai-based airline Emirates signing on naming rights sponsor in a three-year deal said to be around $1 million a year.

It also signed Sydney-based health insurer MBF as one of its other main sponsors in a package understood to be worth $1.05 million over three years.

But it’s the West Coast Eagles that remain at the head of the state’s sporting hierarchy, and the sponsorship arena is no different.

The club’s sponsorship arrangement is unique, with its two joint-major sponsors, SGIO and Hungry Jack’s, partners for the long-term.

It is understood each company’s sponsorship is worth up to $750,000 a year for three years, with the Hungry Jack’s deal having a variable component based on the team’s on-field performance.

On these numbers, the total sponsorship amount of $4.5 million over three years represents the largest sponsorship package in the Perth market.

However, the largest single-company sponsorship is the three-year, $3.5 million agreement LG Electronics signed with the Fremantle Dockers to become the club’s major sponsor before the start of the 2006 football season.

The depth of clubs’ sponsorship support is of vital importance to the balance sheet.

The Eagles have 33 sponsors in total, ranging from ‘support’ sponsors that contribute in the order of $70,000 a year, to ‘sponsor’ level, where the commitment is up to $250,000 and ‘elite’ sponsors worth up to $1 million a year.

The Dockers have four sponsorship levels. It is understood that ‘silver’ sponsors kick-in about $80,000 a season, ‘gold’ level sponsors from $200,000 to $325,000, and ‘diamond’ partners between $325,000 and $500,000 per season. ‘Platinum’ sponsors contribute amounts of $500,000 and above each year.  

At the other end of the sporting paddock are second-tier teams such as the Perth Wildcats basketball team and A-league soccer outfit the Perth Glory.

Despite operating as professional teams in their competitions, with most players employed full-time, competition for sponsorship is much tougher and the budgets are much tighter.

Wildcats chief executive Nick Marvin told WA Business News the club’s sponsorship budget for the upcoming season would be up to $1.5 million.

The club is currently looking for a new major sponsor, worth about $500,000 a year. 

Perth Glory is another searching for a new major partner, with Western QBE insurance recently concluding its eight-year deal with the club. Its sponsorship was reported to be worth $300,000 for the coming season. But the Glory does benefit from league-wide sponsorships from the likes of Qantas, Hyundai and Zurich insurance.