Sponsorship - the ties that bind

by Lorien Pilling

Above picture, Speakers on the night: (Right to left), Greg Nichols, MD Sporting Affairs, Betfair, Merrick Haydon, MD, Revolution Sports Marketing Group, Paul Renney, Partner, Campbell Hooper Solicitors LLP, and Gareth Wong, Founder of GamBond, and Gambit special interest group.

When AC Milan lifted the Champions League trophy in Athens in May, the Italian club was not the only winner that night. As the team's shirt sponsor, online gambling firm Bwin had its brand name seen by a worldwide television audience running into the hundreds of millions. But should e-gaming companies be looking to gain more from their sponsorship deals and what implications will the new UK Gambling Act have on future partnerships? For its June event the Gambit e-gaming discussion group met to discuss these sponsorship issues.

Merrick Haydon, managing director of the Revolution Sports Marketing group, was quick to stress that sponsorship was not the same thing as advertising. One of the strengths that sponsorship enjoys is that it is always at the heart of the action, whereas the traditional television advertising market is fragmenting and new digital technology is making it too easy to edit out adverts.

Sponsorship, Merrick argued, is becoming an increasingly sophisticated marketing discipline, moving away from the traditional reasons for doing deals: simple brand awareness, hospitality, and the whim of the chairman (or chairman's wife?). Instead, sponsorship is now being seen as a central marketing platform, from which other activities, such as sales promotions, PR, advertising, competitions, and even recruitment, can be launched. A measure of this new focus on sponsorship is the forecast that it will account for 15% of the total marketing spend in Europe by 2012, compared to 8% currently.

For his case study Merrick talked about the Football Furlong event, a football themed race meeting held at Haydock Park. In 2006 the event was sponsored by 32Red.com, which was keen to promote its association with Aston Villa and its new sports book. He described the 360 degree activity that took place around the basic race sponsorship: mascot races, celebrity event ambassadors, football games, and competitions.

Merrick believes that the market will see fewer, but larger, sponsorship deals, as it becomes harder for traditional television advertising to succeed. There is ever increasing live sports coverage and the emphasis should be on delivering business opportunities through such sponsorship deals.

But as Unibet (with its cycling team) and Bwin (with AS Monaco) have both discovered, not every partnership goes smoothly and Paul Renney of Campbell Hooper Solicitors was on hand to look at the legal aspects of sponsorship.

Paul has previously worked with the British Horseracing Board to develop rules for sponsoring jockeys' silks and he expanded on this topic to tackle the issue of integrity when sports teams and individuals are supported by gambling operators.

Attention inevitably turned to the Gambling Act and specifically part 16, which covers advertising of gambling. Definitions in the Act are very broad and recent consultation papers from the Gambling Commission and the Committee of Advertising Practice suggest that the new regime from September 2007 will be stringent, particularly in the area of social responsibility in promoting gambling services.

Away from the UK, Paul highlighted the problem faced by the bookmaking firm Coral in its sponsorship deal as the betting partner for rugby union's Guinness Premiership. When the English teams played in France for the European cup games they were forced to cover up the Coral logo on their shirts to comply with French law.

Betting exchange Betfair is another gambling firm that is not finding it easy to do sponsorship deals outside of its UK market because of local restrictions, most notably in Australia. Greg Nichols, Betfair's managing director of sporting affairs, did maintain that the exchange had aspirations to be recognised as a global brand, despite these restrictions.

He went on to describe how the scale of its sponsorship in the UK has grown as the company itself has grown. To begin with, Betfair focused on the low level sponsorship of horseracing, reflecting the fact that, at the time, most of its revenues were derived from racing markets. In 2002, it became a sponsor of Fulham FC but, as Greg admitted, failed to get the most from the partnership because it only lasted for one season.

Betfair's more recent move into cricket sponsorship was made because it wanted an association with a typically British sport. As luck would have it, the deal came about at just the right time for Betfair and the company benefited from being linked to a winning team when England won the Ashes battle with Australia in 2005.

For the online gambling industry, successful sponsorship partnerships are perhaps the most important of all marketing activities. Usually without a high-street presence and located in off-shore jurisdictions, e-gaming firms can give a tangible form to their business and brand by being associated with a high-profile sporting event, team, or athlete. In an industry where player trust and brand reputation are everything, such links can help cement the right corporate image and enhance customer loyalty.

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Speaker Profiles:

Greg Nichols joined Betfair in September 2006 as Managing Director for Sporting Affairs, having spent 20 years at the forefront of racing governance in Australia and Britain.

He was previously Chief Executive of the British Horseracing Board from 2002 to 2006, a time of unprecedented success for British racing. Greg presided over a transformation of racing’s fortunes through a testing period of its history, with specific focus on the monetisation of the sport’s intellectual property rights, the modernisation of the sport and the successful management of a competition law/Office of Fair Trading investigation.

His involvement in Australian racing began with appointment as Managing Director for Racing in South Australia in 1993 leading to his appointment in 1996 as Chief Executive of the South Australian Thoroughbred Racing Authority. He was subsequently appointed General Manager for Racing Victoria in 1998, with responsibility for the internationalisation of Australian racing, specifically, the Melbourne Cup.

Prior to racing, Greg played semi-professional football (Australian Rules) for Geelong in the Australian Football League. He is a keen racehorse owner with interests in both Australian and British thoroughbred horse racing.

Greg is a Non-Executive Director of Betfair Australia, a joint venture comprising Betfair UK and James Packer’s Publishing and Broadcasting Limited.

Paul Renney is a Partner in the Commercial/IP/Media group at the Westminster-based law firm, Campbell Hooper Solicitors LLP; he joined them in May from Addleshaw Goddard, where he had been a Partner in the Sports Group and had advised on a number of high profile and less high profile sponsorship arrangements, especially in the horseracing industry; he advised the British Horseracing Board on all its commercial arrangements for over 13 years, in particular the Order of Merit sponsorship with a number of racecourses, and the Owners and Jockeys sponsorship codes, as well as other sporting sponsorship deals. He put together and co-chaired a seminar on sponsorship and gambling last autumn, and has recently worked on a high value/long term sports sponsorship agreement.

He also advises on major advertising campaigns and promotions, as well as the media side of corporate media joint ventures, acquisitions and disposals; he also advises on gambling law, especially in the run up to the Gambling Act coming into force in September 2007.

Merrick Haydon is Managing Director of Revolution Sports Marketing Group. Merrick has worked in the sports marketing and sponsorship industry for over 14 years and has extensive experience across many sports events and properties, working with clients such as American Airlines, BMW, MasterCard, UBS and Volkswagen. Merrick has worked with major international sponsors, federations and rights holders to maximise sponsorship programmes as well as devising and implementing sponsorship strategies.

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