Private funds a winning play

13/02/2008 - 22:00

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Outside of the lucrative environment of the AFL, finding sponsorship can be tough in the arena of sport, with many clubs turning instead to private investment.

Outside of the lucrative environment of the AFL, finding sponsorship can be tough in the arena of sport, with many clubs turning instead to private investment.

For the Perth Wildcats, the improvement in the club’s financial performance has been dramatic since Jack Bendat acquired a controlling stake in March 2006.

Wildcats chief executive Nick Marvin told WA Business News the club was set to have its best ever season in 2008.

“We’ll come very close to a profit, but we won’t know until the final series. It will depend how we do there,” Mr Marvin said.

“We’re definitely on track to make the club sustainable.”

By the end of this season, the club will have doubled its earnings from corporate hospitality, compared with last year.

Sponsorship is up by about 35 per cent, with the Wildcats having secured major sponsors Saville Australia and RAC in 2007.

After years of stagnating membership, the Wildcats’ list is effectively full this season, up from 1,670 to 3,500, with just a handful of places available in standing room.

A-League soccer team Perth Glory has also had an improved season following its return to private ownership.

Almost one year ago, a consortium of Perth businessmen – Cape Lambert Iron Ore Ltd executive director, Tony Sage, Australian Finance Group managing director, Brett McKeon, and Karma Resorts owner John Spence – assumed control of the club from Football Federation Australia.

Since then, the club has grown its membership from about 4,000 to 5,500.

While the Glory is not due to finalise its accounts until June, sponsorship has tripled and corporate hospitality sales have doubled.

According to chief executive Scott Gooch, the club’s results can be attributed to its new management, as well as improved corporate linkages resulting from the change in ownership.

“There were holes in our sponsorship program, so we identified a few prominent brands,” Mr Gooch said.

“We took a more concerted approach to securing partnerships in specific areas.”

Part of the club’s strategy was to introduce two function rooms, catering to different ends of the market, as well as VIP box packages, which Mr Gooch said drove the increase in sponsorship revenue.

Despite the success of men’s basketball and soccer, women’s sport has failed to generate the same interest from the private sector.

However, new broadcasting arrangements may help to create sponsorship opportunities for several codes.

WA’s league netball team West Coast Fever, formerly known as the Perth Orioles, believes it will be a more attractive proposition for corporate sponsorship this year, given the national competition will be broadcast on Fox Sports for the first time.

The broadcaster has secured the rights to the new trans-Tasman competition, which is being sponsored by ANZ Bank.

The Fever currently has a partnership with the West Coast Eagles, although this mainly involves sharing of resources and mentoring.

It receives the bulk of its funding from Netball Australia.

Similarly, women’s basketball team Perth Lynx has one major sponsor – Healthway – and no corporate sponsors.

But that could change if a proposed merger between Basketball Australia and the US National Basketball League goes ahead.

“If that happens, then the result may be a very good potential for someone like Fox Sports to purchase the whole sporting coverage of the NBL, WNBL and others,” Basketball WA chief executive Rick Smith said.

“It would raise our profile and increase the chances of sponsorship.”

Lynx games are not currently broadcast on television.

Hockey WA has a small sponsorship program for its two league teams – the Diamonds and the Thundersticks – although the organisation is hoping to grow this revenue stream.

The state’s two teams received about $100,000 in corporate sponsorship last year, which was a four-fold increase on the amount received three years ago.

Most of this came from hockey equipment providers, accommodation groups and wine sponsors.

The organisation, which has one of the biggest operating budgets of all the states ($4.5 million), recently appointed a profile and brand manager to develop a strategy for sponsorship.

Hockey WA chief executive officer Linda Hamersley said a national strategy was also being put together to raise the profile of the sport in a bid to get television coverage.

“We’re about to call for tenders for a consultant to rework the Australian Hockey League, to make our product marketable and get media coverage,” she said.

“As this point, we acknowledge that no-one is going to come in and give us $100,000, because we’re not getting enough exposure.”

Ms Hamersley said the national league was expected to finalise its branding strategy later this year.

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