The Globalisation of Rightsholders

The globalisation of sport has entered its next evolution, with geographical boundaries now more blurred than ever and global-local tensions becoming ever more apparent.

rightsholder globalisation -world map

The movement towards globalisation can be traced back as a by-product of Imperialism. As the Empire spread to all corners of the globe, so did the pastimes of the British. In fact, Britain’s colonial footprint goes a long way to explaining the universal popularity of sports such as football, tennis and golf and also shows why rugby has been confined to such an improbable mix of nations. The fact that the United States have traditionally shunned football, cricket and rugby in favour of their own national sports is likely, in part, to be down to a deliberate rejection of all remnants of their colonial past.

Fast forward a couple of centuries and the codification of these sports led to international competition and global fan-bases for athletes, clubs and leagues alike – all fuelled by extensive media coverage and brand involvement through sponsorship.

We are now firmly into the next phase of play, with rightsholders and sponsors going further than ever before to exploit lucrative new audiences in emerging markets and to satisfy an ever increasing demand from fans for richer engagement with the leagues, teams and athletes that they love.

Sport, after all, is big business. Speak to any modern rightsholder and you would be forgiven for thinking that you have stumbled into a corporate board meeting, with brand health, product portfolios and extension strategies top of the agenda.

And, like any corporation, these businesses need to grow, which ultimately means spilling over borders. In the absence of significant barriers to mobility (be they legal, economic or cultural), business and talent will naturally migrate to where it is valued most highly, with the growing middle classes of emerging markets such as China, India and Brazil providing precisely those conditions.

The middle class in China, for example, is said to be growing in size by 50 million a year, whilst in India it is expected to reach 600 million by 2030 – up from just 250 million in 2007. These people have money in their pockets and are seeking new distractions.

Off the field decisions are increasingly related to commercial activity. It’s the reason behind The British and Irish Lions’ recent pre-tour fixture in Hong Kong, courtesy of lead sponsor HSBC; it’s why the Premier League continues to explore the opportunity for a 39th game on foreign soil, why the New Zealand All Blacks recently played in front of a record crowd in the United States (AIG) and why pre-season tours now, more often than not, coincide with the headquarters or business focus of the lead sponsor.

These examples (of which there are many more) provide physical interactions with ‘brands’ (whether they be corporations, leagues, teams, or even athletes) for audiences, who, in years gone by, could only dream of this level of access on their doorstep – all of which adds up to a very potent marketing opportunity. After all, once you have sold them your brand, you can sell them a lifetime of products.

Globalisation will typically favour the biggest companies and brands, who have the resources and scale to exploit the demand. This is why there are relatively few large global banks, and why only a handful of leagues across the world draw the biggest audiences and attract the best players. Over time, this will begin to trickle down and smaller clubs and leagues will benefit. We are already at this place in the Premier League to an extent – with just five of the 20 shirt sponsors being UK-based, whilst nine of these teams alone took a pre-season jaunt to the United States and a further five visited the Far East.

What we are also seeing more of is clubs, leagues and brands creating content exclusively for the ‘foreign’ market. Manchester City and Tottenham Hotspur, for example, have launched a number of dedicated foreign language social media sites, whilst multi-national sponsors regularly release bespoke creative, targeted by market.

Perhaps the most oft-cited example of globalisation in sport is Manchester United, which is said to have 173 million fans in Africa and the Middle East and a staggering 325 million in Asia. At the last time of counting, commercial partners spanned 72 countries, with vehicle manufacturer Chevrolet (who no longer sell new cars in Europe) paying an estimated £53million for a place on the front of the club’s famous red shirt. Added to the fact that United are US-owned, their ties to Manchester don’t seem to extend much beyond name and stadium.

Over on the blue side of Manchester, another new and unique model is taking shape. Manchester City is now the focal point of the ‘City Football Group’, a network of linked clubs owned by parent company the Abu Dhabi United Group, which includes newly formed New York City FC and Melbourne City FC. This model of ownership sees shared resources between clubs, including players, coaches and sponsorship, helping to grow the Manchester City brand globally and giving ‘City Football Group’ a footprint in hugely lucrative markets, where passion for football is gathering momentum. And let’s not forget the exposure for Abu Dhabi-owned Etihad, which now adorns the shirts of all three teams, with New York and Melbourne both key routes for the airline.

So, what impact does a greater number of truly global properties have on sponsors? Whilst rights fees for the larger properties will continue to rise as commerciality increases in new markets, there is significant potential for global brands to become both more aligned and cost-efficient in their approach to sponsorship. Rather than selecting individual (and often unrelated) assets in local markets to solve local business needs, a single global asset can be used across markets and tailored for local requirements. Granted, global properties exist now, and have done for some time (e.g. World Cups and Olympic Games), but it is a very finite list. More global properties means more opportunities for more brands. The challenge for brands is to manage this consistency across markets, whilst remaining culturally relevant.

What is often overlooked, however, is that sport deeply differs from traditional business. Team sports in particular can be fiercely tribal and territorial. Local fans feel a sense of ownership, which transcends the goings-on in the boardroom. This leads to inevitable global-local tensions, which will only continue to grow as demand increases from across the globe.

Further tension occurs when this commercial activity has a positive impact on the pitch, with funds for better players, staff and training facilities. Would I trade a greater degree of separation from my beloved Aston Villa, if they were geared up more for global markets, for even a semblance of success? I think I probably would. But inevitably there is going to be a tipping point, which will differ in each individual case.


What of the US fans of the Jacksonville Jaguars – the team expected to make the transition from the US to a permanent NFL franchise in London – for example? The move is purely driven by commercial gain and will surely alienate the good people of Jacksonville, Florida, where they have been supporting their team in the NFL since 1995.

As a word of caution, the London Monarchs started with crowds of 40,000, but by the time life-support was finally switched off, the average gate was closer to 6,000. It therefore remains to be seen whether the UK can support a permanent franchise from the US.

Fans hold posters of NBA basketball player Kobe Bryant as they wait for a promotional event in Guangzhou

Indeed, it seems that the NBA sees its own expansion as regular overseas games, as part of the NBA Global Games schedule, rather than a permanent non-US franchise. Since 1988, more than 100 games have been played internationally, in countries including Japan, Mexico and the United Kingdom. Over 2014 and 2015, nine NBA teams will play seven regular-season and pre-season games across six countries.

So, how do we think globalisation in sport will develop over the coming months and years…

1. We will see a greater number of rightsholders create bespoke content for markets across the globe. Marketing departments’ thoughts will no longer be ‘UK first’. This will be particularly prevalent in social channels.

2. As with the examples cited earlier, there will be a continuation of commercially driven one-off events in non-domestic markets. The NFL will be the first to take up a permanent residency in a foreign market, but it will be some time before others follow – in any sport.

3. There will be increased regulation governing bodies to try to find the balance between global opportunity and local tradition. This could be through the incentivisation of only allowing domestic-based players to play for the national team (as we have seen in Rugby Union with New Zealand & England) or by introducing quotas of home-grown players (as seen in the Premier League and cricket’s Indian Premier League). These have the benefit of not only safeguarding the quality of the national team, but also strengthening home ties.

4. Foreign owners of UK-based clubs will seek to follow the Manchester City model and purchase franchises in emerging markets. This is never likely to be commonplace practice due to the sheer level of investment required, but expect to see it replicated.

5. It is feasible that we may see fans fight back, using fan ownership models seen in Germany to retain a greater degree of control of their clubs.

The geographical boundaries which define the most prominent sporting properties are eroding as the world continues to become ever more connected. Whilst this provides lucrative opportunities for brands and rightsholders alike, there are underlying global-local tensions which are only likely to become more pronounced over the coming months and years.

Sport is inherently different from normal business, with an often fiercely tribal local following – a factor which should not only not be underestimated, but celebrated.

Tom's blog comes from Synergy’s Now, New & Next sponsorship outlook for 2015, which can be viewed in full here.

Sponsorship Valuation: Standing up for the Sponsors  

Sponsorship valuation is driven by rightsholders. The simple fact is that they tend to be the ones paying for the analysis, and whoever pays the piper calls the tune.

It makes complete sense for the rightsholders to be leading this particular charge. They have sponsorship properties to create and sell. They not only need to know where to price them but also need to be able to justify that price during the sales process.

A whole industry has grown around this proposition. In fact, just yesterday ESP Properties, a new “super-agency” born out of IEG, GroupM and Two Circles was formed to focus on exactly this. They will be taking the fight to IMG, CAA, Wasserman, Repucom and the many others who all have their sights trained firmly on this space.

There is no doubt that these are all great agencies doing some pretty sophisticated things to help rightsholders better understand and maximise the amount of money they can command for their sponsorship properties on the open market. Because, at the end of the day, the value of a sponsorship property from the rightsholder’s perspective is the same as the value of a house: it is worth what someone is willing to pay for it…and you only need one party to be willing to pay that. Effectively that means that rightsholder consultants are like estate agents, helping the rightsholders determine the “list price” based on market benchmarks and the property’s features (rights) and helping them find a buyer.

Estate agents boards offer property in Brighton

But in this rush to help the rightsholders monetise their properties, who is helping brands understand the value of their sponsorship, independently and without any conflicts of interest?

This is particularly important, because, as we argued in our Synergy Decisions White Paper, a sponsorship does have a real, economic value to the sponsor: the increase in the company’s value as a result of increased revenue or decrease costs.  But this value is entirely contextual of the sponsor and their activation campaign.

To put it bluntly, the exact same sponsorship property with the same basic rights would have a completely different value to Coca-Cola, McDonald's, P&G, Samsung, Panasonic, Visa, Toyota, Bridgestone, Omega, GE, Dow, Atos.  That’s because each of those companies has different business models, audiences, products, routes-to-market, marketing channels, purchase drivers and competitive environments.

Further, the exact same property would be worth a different amount to the same brand depending on how effectively they activated it. For example, I don’t think it’s too controversial to say that the London Cycle Hire scheme could have been worth far more to Barclays (and no doubt will be worth far more to Santander) had they done more with it.

The challenge for brands is to determine the economic value their sponsorship does or could create. And this requires a completely different approach to the one that rightsholders use – one like Synergy Decisions.

Synergy named Agency of The Year at BT Sport Industry Awards

Synergy was named Sport Agency of the Year last night at the BT Sport Industry Awards in London, receiving the coveted accolade - the top honour in the UK sports sponsorship industry - in front of an audience of 1,750 of sport's most influential names at the largest and most prestigious event of its type in Europe.

Synergy took the award after a stunning 2014, which saw the agency post impressive financial results, deliver innovative campaigns for clients around the world, and win a raft of new business, including Accenture, Aviva and Canterbury. The judges reserved particular praise for Synergy's vibrant culture, creativity and industry-leading investment in its people.

Synergy CEO Tim Crow was joined on stage at Battersea Evolution by Synergy’s Chief Strategy Officer Carsten Thode to collect the Agency of The Year trophy from Rugby World Cup-winning former England winger Jason Robinson and ex-Wales and British & Irish Lion Shane Williams.

Read Sport Industry Group's summary of the event here and see the full list of winners here.