THE proposed break-up of Western Power is a major concern for the many WA sporting and community groups to benefit from the power utility’s$2 million annual sponsorship spend.
THE proposed break-up of Western Power is a major concern for the many WA sporting and community groups to benefit from the power utility’s
$2 million annual sponsorship spend.
Indeed, the loss of the utility from the sponsorship market could create a scramble as organisations compete for funds in a diminishing pie.
Western Power is spending between $1.5 million and $1.7 million in cash and kind sponsorships this year, spread among a number of groups such as the WA Cricket Association, Kings Park, the WA Symphony Orchestra, the Perth Zoo and Scitech.
The Electricity Reform Task Force has recommended that Western Power be split into four entities on July 1 2004.
However, ERTF member Frank Harman said the WA Government could decide to effect the break up much earlier.
A Western Power spokesman said existing sponsorship arrangements were not something it was thinking about at the moment.
“Our process is to call for expressions of interest in March to May. A lot of consideration goes into deciding what sponsorships we will enter into,” he said.
One of Western Power’s main sponsorship recipients is the WA Cricket Association. Sponsorship dollars are funnelled to the Western Warriors and regional cricket development programs.
WA Cricket Association CEO Kath White said she was unsure how the break up would affect WA cricket.
Western Power renewed its arrangement with the Western Warriors for a further 12 months earlier this year.
A Western Power spokesman said the future of that sponsorship would be decided before the end of the 2002-03 cricket season.
Vision Events Management director Peter Hesketh said the break-up of Western Power could result in a scramble for the remaining sponsorship dollars.
“There will be a shortfall in the sponsorship fund market,” he said.
“The sponsorship market is not buoyant. You never have enough sponsorship out there.
“More people view sponsor-ship as a vital part of their business.
“The loss of Western Power will certainly hit the sponsorship industry.”
However, Marketing Centre director Michael Smith said he believed Western Power could become a bigger player in the sponsorship market in the lead up to its break-up.
“I think sponsorship will become more important for Western Power. It has handled its sponsorships well and will use them to express the WA nature of its business and the role it plays in the community,” he said.
“It will be seeking meaningful personal contact with the people it wants to do business with.
“I think Western Power will try to negotiate some exclusivity in the sponsorship contracts it has to make sure they are not exploited by the competitors that are sure to come.
“I think it will be renewing
its sponsorships now and looking to lock them away.
“Some of these competitors are likely to be from the eastern States, which is why Western Power will want to play up its WA connections.”
Mr Smith said he believed the Western Power name would survive beyond the proposed break-up.
“If it doesn’t it will be ludicrous because it is a multi-million dollar brand,” he said.
“One of the things to be tested with this is Western Power’s involvement in regional areas.
“If Western Power is under-funded and cannot cover unprofitable regional customers
it could be harmful to the brand.”
Mr Smith said it would be interesting to see which of the entities proposed from the break-up would keep the Western Power identity.
The ERTF has proposed the utility be broken into a business looking after regional customers and State Generation, State Retail and State Networks entities.
This is not to say that one of the new entities will not be keen to enter into the sponsorship market. Marketing experts say State Retail would be the entity most likely to keep the Western Power name and be the most active in the sponsorship market.
