11/02/2009 - 22:00

Sponsors rethink strategies as crisis bites

11/02/2009 - 22:00


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THE state's sporting codes are bracing for challenging times as they face a crowded sponsorship market and the global economic crash forces companies to tighten their purse strings and scrutinise discretionary spending.

Sponsors rethink strategies as crisis bites

THE state's sporting codes are bracing for challenging times as they face a crowded sponsorship market and the global economic crash forces companies to tighten their purse strings and scrutinise discretionary spending.

Recent news that Vodafone would pull out as a major sponsor of both rugby and cricket could not have come at a worse time, with corporate sponsorship across all sports affected by the credit crunch.

Vodafone's withdrawal from sponsorship is a double-whammy for RugbyWA following last year's collapse of Western Force sponsor Firepower, which had high-profile Wallabies such as Ryan Cross and Cameron Shepherd on its payroll and left fly-half Matt Giteau $1 million out of pocket in a three-year deal.

Western Force chief executive Greg Harris said despite the significant impact Firepower's collapse had on the financial situation of the club, there was a silver lining.

"We're in a much more improved position in terms of our brand alliance now that Volvo has replaced Firepower as major sponsor," he said.

Wildcats chief executive Nick Marvin said while there was an inherent risk in appointing relatively unknown companies like Firepower to sponsor a club, there often was no alternative in Western Australia.

"Sponsorship is critical but sport inherently attracts one or two types of customers - young companies that need to create a brand or companies that already have a brand but want to reinforce it," he said.

"When you have the former you risk these issues. The issue with Firepower was it was an emerging company looking for brand recognition, and therein lies an inherent risk of the company not making it - and that's exactly what happened."

Fremantle Football Club's new chief executive, Steve Rosich, said the Dockers had grown to a point where it was among the top-ranked AFL teams in terms of sponsors and revenue generated.

"Sponsorship is very important on a number of levels. Firstly, it's an important driver of the economics of a football club and we're very fortunate that we've been able to grow year-on-year sponsorship revenue over the last five to six years," Mr Rosich said.

"So it's very important economically but it's also very important for your brand - the type of companies that you associate with.

"It's also important to members in that we work very hard with our sponsors to ensure that they provide members an opportunity to access their products and services at a level that the general public perhaps does not."

Despite the economic downturn, the Dockers have 550 companies in commercial partnerships, extending to advertising, corporate hospitality and sponsorship.

The West Coast Eagles, which has SGIO and Hungry Jack's as long-term sponsors, believe retention and securing long-term deals is key to any club's success.

Eagles chief operating officer Richard Godfrey said the club was very selective of which brands it aligned with.

"We're extremely fortunate; we've built up a good relationship with our sponsors over the years," he said.

"We've got a lot of long-term sponsors, with some that have been with the club since its inception. At the moment, if we see an opportunity for sponsorship we might seek out a particular type of business, but it depends, the sponsor might get exclusivity.

"They may be protected under AFL rules, which mean you can't engage anyone else to sponsor you from that industry.

"All our sponsors are well-run companies as far as we're concerned and we go through a good due-diligence process in appointing new sponsors."

The WA Cricket Association is very protective of its major sponsors and will only engage a company for a sponsorship deal if it receives prior approval from Cricket Australia.

After rebranding in 2007, Netball WA underwent positive growth in terms of sponsorship and other partnerships, securing a triennial agreement with Healthway, which included increased funding.

However, a report by Australian sports researcher Sweeney suggests awareness of individual sponsors has decreased in recent years. This is believed to be the result of increasing saturation of sponsorship opportunities due to the number of companies trying to lever associations with sportspersons, sports and sporting events.

Nike has regained top place in the Australian sponsorship list during 2008, overtaking former long-time leader Uncle Tobys.


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