Sports Consultancy - Spreading the Knowledge

The Sports Consultancy

www.sportspromedia.com

2013

Destinations Report

Title The Here Sports Consultancy

SPREADING THE KNOWLEDGE The Sports Consultancy – SportsPro’s official knowledge partner for our Destinations Annual Report 2013 – offers a uniquely structured approach, which can be traced back to the professional services industry, for both cities looking to build a major events strategy and for rights holders looking for the perfect host.

By David Cushnan

hrough a combination of indepth sporting knowledge, honed over many years of involvement, and the professional services approach that comes with a management consultancy and legal background, The Sports Consultancy has managed to set itself apart from a growing band of sports industry bid consultants.

Angus Buchanan and Robert Datnow, the former an ex-professional sailor, the latter an athlete who represented Great Britain, are both qualified lawyers. Together, in 2006, they formed The Sports Consultancy, a London-based practice which aims to bring a culture of process and therefore clarity to the complex and nuanced world of bidding for and staging major sports events in cities, regions and countries around the world.

“What makes us a little different, I think, is the fact we don’t come from a classic sports industry background,” offers Buchanan, “and so we bring our experience of competing and being involved in major events and then combine that with our experience and training as lawyers.” The pair met working for the same client when the Volvo Ocean Race, for whom Buchanan was working as commercial director, struck a deal with Disney to promote

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the first Pirates of the Caribbean film.

Datnow was working on the deal as a partner at Farrer & Co, the law firm instructed by the Volvo Ocean Race.

“That was quite a complicated deal and we spent a lot of time working together,” Buchanan recalls. “I think we decided at that point that we shared a perspective on what we could do as an agency in the sports landscape, which was to try and combine our experience of being involved in, competing in, and then the delivery of those sports events and then bringing a little bit of a professional services approach to agency – so trying to bring the discipline and rigour of a professional services background training through into the sports industry.”

Over seven years on and with Buchanan and Datnow now leading a team of 12, The Sports Consultancy is well established as a key source of advice for both host cities and rights holders, sports brands and venues.

It has carved out something of a specialism in host city procurement, initially working in 2008 and 2009 on what Buchanan describes as creating “very well-structured, transparent and fair host city processes” for the Volvo Ocean Race for its 2011/12 edition. It is currently engaged in doing the same for the next two editions of the race.

“We are able, because of the skillsets we have in the business now, to offer strong commercial and legal services as a necessary ancillary part of what we do in terms of looking through host city requirements,” says Buchanan, “working with the rights holders to establish what is necessary and in some cases what is not, structuring the rights packages between the sport event and the host city, creating all of the marketing materials that are necessary to create the bidding process, running the bidding process, and negotiating all of the host city arrangements.

“We have developed over the years because we are now consulting both on the host city side and the events side – not for the same events, obviously – and have developed a very good understanding of what the rights holder wants and what its priorities are when it’s looking for a host city, and what the host city is looking for when it hosts a sports event. We can tailor that approach for the rights holder accordingly, to make sure they are looking for and picking out those areas that bring substantial value to a host city and creating, from the outset, partnerships of mutual benefit with host cities.”

The other broad area in which

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The Sports Consultancy specialises is strategic consultancy to wouldbe hosts, where its clients currently include London, Dubai and Ireland.

“Right at the moment they are beginning to consider how they deliver their destination marketing, inward investment objectives and other social or infrastructure initiatives through sport,” Buchanan continues, “we can advise them on the sorts of sports events they should be considering hosting in order to deliver against those objectives. And we can advise on best practice when it comes to the structuring of city, regional and national government in order to optimise their chances of securing those events but also going on to effectively leverage the benefits of hosting major sports events. We bring our perspective of working with major sports events looking at the host cities to the table when we are consulting to host cities.”

A natural progression is to continue to develop the side of the business providing assistance to cities in bidding for major events, an area Buchanan explains The Sports Consultancy is “looking to grow into”.

At the start of 2012 The Sports Consultancy acquired Capita Symonds’ sport and leisure advisory team, adding further expertise to the business in the field of major event feasibility evaluation.

“That’s a very natural adjunct,” Buchanan says, “but particularly when it comes to working with host cities on the strategies and implementation of major sports events.”

The importance of the Volvo Ocean Race to The Sports Consultancy’s development cannot be underestimated. Buchanan and Datnow have provided legal work across all aspects of the event’s business operations, which often straddle geographical borders, and have assisted on sponsor and now venue acquisition, adding structure and process. “There’s a parallel between the work we’ve done for them and

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Case study: London’s joined-up thinking “

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ondon, with the Olympic Games, was a fantastic example of joinedup thinking,” suggests The Sport Consultancy’s Robert Datnow, who as a former head of legal for the British Olympic Association (BOA) was involved in the early-stage feasibility study for what ultimately became one of the most successful Games in history. Watching London plan its Games up close had a marked effect on what The Sports Consultancy itself would become.

“London is an incredibly complicated city, with all its various boroughs,” says Datnow. “When you cast your mind back to the early days when I was involved at the BOA there was no London Mayor – the Mayor was appointed during the feasibility phases of planning a London Olympic bid.

London coordinated its bid in the way a bid has to be coordinated, with a National Olympic Committee, with a newly appointed Mayor representing London, and with central government, the Department for Culture, Media and Sport (DCMS). In those days it was Chris Smith and Kate Hoey; it became Tessa Jowell.

“The genesis of this part of our business has stemmed from those early days of watching, assisting and advising how government coordinates itself through the core stakeholder group and the secondary stakeholder group, and the meticulousness with which London went about planning – there was a fully

the genesis of the company as a whole,” says Datnow. “They have found the type of law that we provide is internationally relevant, specialised and cost-effective because it is packaged with our broader work.

“We’ve also acquired sponsors and we have a metrics-based approach – an analytical, professional service

worked-up west London option as well as a fully worked-up east London option. We certainly got a taste for the application of our skills in a complex, multi-party public-private stakeholder bid for a major international event from a major world city. That’s led into other bids that we’ve managed, with Madrid and the Ryder Cup.” Datnow explains that The Sports Consultancy was engaged in a new project with London & Partners, the official promotional organisation for Britain’s capital city, called RideLondon, a city centre cycling event featuring mass participation and elite elements that will debut in August 2013. “We compared and contrasted the concept with other mass participation events and elite events and also coordinated with London & Partners in relation to the other project stakeholders, the Greater London Assembly (GLA) and Transport for London (TfL).”

Datnow believes the success of London 2012 was, at its core, a result of clarity of structure. “It was the way they were organised at city, regional, borough and national government level,” he says.

“Those constituent stakeholders all had a voice, right from the start. People think the start of the Olympic bid was somewhere around 2002, but in fact the country had bid before – Manchester and Birmingham – and a London bid was worked up through 1998 all the way through to 2005.”

approach. We have the same approach with venue acquisition. We’ve noticed before how other rights holders approach that process and the net can be quite narrow. They’ll say to themselves, ‘There are certain places in the world where we want this event to go.’ We, quite deliberately, have avoided that approach and spread the net, in

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What next – and where?

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sk Angus Buchanan and Robert Datnow how the major event landscape will evolve in the coming years and their answers quickly focus in on the BRIC nations.

Predictable it may be but Buchanan says Brazil, Russia, India and China simply cannot be ignored. “There will be continued growth,” he says.

“We’re seeing two of the world’s largest sporting events heading to South America for the first time and I think, from our experience so far in that region, that only serves to increase the appetite for major events, particularly beyond 2016. We are actively dealing in Brazil at the moment, looking at the gap between 2014 and 2016.

“The I of BRIC is yet to really maximise its hosting of major sports events,” Buchanan continues. “In some ways it shows how you really do need to have quite a sophisticated approach in both bidding for and then hosting the events or the experience can end up being not entirely positive. India is quite capable of hosting major sports events. We’ve managed a sports event in India, it was a success and they benefited from that, but I think they will need to look at the way they approach events in the future to make sure they are able to present India’s best face rather than some of the problems they had surrounding their hosting of

a very structured process – in terms of having an expression of interest phase, an applicant phase, a candidate phase, a decision phase, with professional evaluation running through it – quite wide on the basis that the rights holder doesn’t often know specifically what funding cycle a city is in, what aspirations they have, what venues

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the [2010] Commonwealth Games.”

China, Buchanan says, possesses an “enormous appetite for sporting events and a realisation of the benefits that brings”. He adds: “Is that a tired story? No. The new economic global landscape is going to be very important and I think European markets are relatively static and mature and developed.

For many sports it’s clearly the ability to market their sports events through the hosting of major events in those territories.”

Datnow, for his part, adds that eastern Europe and the Middle East are increasingly maturing as venues for major events, too. “There are some aspirational cities motivated by increasing tourism and destination marketing,” he points out. “There will always be cities around the world that will express interest in sailing, equestrian, tennis events that we have been involved in. It’s not unusual for us to see 60, 70 or 80 cities expressing an interest. I think that says something about the acyclicality of aspirational cities. There will always be cities that are aspiring to have a higher profile for tourism and sport and becoming major industry hubs.

As cities in China or countries in eastern Europe continue to develop they will need to market and compete with the more aggressive economies around the world.”

are being built, what they are planning.

By spreading the net out we draw out those aspirations from a wide group.”

Another innovation identified by Datnow is the development of a structured approach which discloses the full set of legal requirements to bidders at an early stage of the bid process. “We’ve found that bidding

cities like that approach, to know precisely what they will be required to do in exhaustive detail and precisely what the rights holder is bringing, so they can carry out their own budgeting and evaluation and return on investment analysis,” he says.

“The cities, in forming their own view about whether an event is worth bidding for, will need to be able to justify the expenditure of putting on the event but also will need to be able to justify the broader public sector returns on investment when they are standing up in parliament at regional, national or city level. The metrics of media reach in all its various platforms and the metrics of economic stimulation enable those cities to be able to answer those difficult questions and justify their expenditure with some clear answers as to what return on investment they might expect. Those innovations, plus the structured, ordered, professional approach, have really become a core part of our relationship between event and host cities.”

In addition to the Volvo Ocean Race, The Sports Consultancy is currently helping the Women’s Tennis Association (WTA) to find a venue for its seasonending WTA Championships from 2014 onwards, as well as having helped the International Equestrian Federation (FEI) in the early stages of securing a European Championship venue in 2015 and a home for the 2018 World Equestrian Games.

The growth of The Sports Consultancy mirrors the rise in awareness of just what a major sporting event can do, financially and socially, for its host. Buchanan argues that, in general, both host cities and rights holders have come to realise the value of hosting rights and, therefore, the importance of getting the selection process right. “The host city – aside from the shareholders of a privately owned sports event – is the most direct recipient and beneficiary of the event,” he says.

“It really drives significant numbers of

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“We’ve found that bidding cities like that approach, to know precisely what they will be required to do in exhaustive detail.”

spectators and international visitors and there is a very tangible economic outcome from that influx of people.

Secondly, it fulfils against what is a major touristic objective for any host city or regional tourism agency, which is promoting the city on the world stage.

There are multiple examples of host cities very successfully raising their international profile, sometimes from relative obscurity, through the hosting of a major sports event. On both sides of the equation there is a much greater understanding of the value of that relationship and that, in turn, has led to an increased sophistication in the approach of both parties to that hosting arrangement.”

A spin-off of that increasing need for sophistication is the rise of consultancies, dedicated bidding agencies, and regional and national event agencies who are developing strategies for growth based around

attracting major events. “It definitely makes it more difficult for the host cities,” says Buchanan of a marketplace growing more cluttered by the year. “I think that will always drive the need for real expertise in consultancy.

“Certainly what we’re finding now, when we’re consulting to host cities and countries such as London, Dubai and Ireland, is their appreciation of that increasingly competitive and professionalised market. Particularly in mature markets, European markets, you look at the landscape now in terms of the regional and national event agencies which have sprung up over the last ten years.”

Buchanan points to the likes of Sport Event Denmark or Event Scotland as prime examples but suggests the Victorian Major Events Company (VMEC), founded in 1991 in order to attract major events to Melbourne, provided the original model which has been replicated widely. “It has seeded many other like organisations,” he says, “who are frankly realising there is a limited market for the big, bluechip events and they need to compete with each other, both regionally and internationally. I think that expertise exists within some of those cities but it also exists with the consultancies like ours that work with the cities in the implementation of those sorts of structures. We are increasingly finding that expertise is in demand from cities looking to recreate the sorts of structures they have seen at VMEC and Event Scotland.

“We have unique experience, not only consulting with host cities but also transacting with those cities on behalf of rights holders, so we get to look at them and test their structures through the processes we run with major sports events. We are able to bring that insight, not just the theoretical approach of the formation of a national event agency but a much more practical perspective of actually dealing with those regional and

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national event agencies.

Buchanan points out that, in many cases, the rise of national or regional event agencies results from failed bids for major events – Victorian Major Events Company, for example, was founded in the aftermath of Melbourne’s failed bid for the 1996 Olympics in 1991. “Bids require significant financial investment but also have significant political capital invested and that can become, frankly, embarrassing if those bids fail so they want to make sure they learn the lessons of failed bids and are able to adapt accordingly.

“When it comes to bidding,” he adds, “there are really significant amounts of money involved. There’s significant capital invested in these Olympic bids but it’s not just the financial investment, it’s now the political investment and with that it brings increasing need for accountability, transparency and fairness. That again is something we’re able to offer as an area of expertise and there are only a few major international agencies who are able to offer that expertise.”

According to Datnow, the professionalisation of the industry has also resulted in cities broadening their own stakeholder groups to ensure everyone is on the same page from the get-go. “They still have an appetite at city level,” he says, “but in order for the city to realise its ambition they are needing to work much more across agencies, working with tourism, sport, inward investment, economic development boards. That is an opportunity for an agency like us, which has experience dealing across the world with complex, multiple stakeholder groups, across the levels of government.

“The fact we were both lawyers in magic circle law firms, the fact we now have five lawyers in-house also from magic circle firms, means we are able to say confidently we are providing a professional service approach – and it’s credible and trustworthy – in a

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“There’s significant capital invested in these Olympic bids but it’s not just the financial investment, it’s now the political investment.”

Both qualified lawyers, Angus Buchanan and Robert Datnow formed The Sports Consultancy in 2006

way others can’t. That chimes very well with the public sector because the public sector are in the business of spending public money and needing to be accountable. There is an agency solution that has that knowledge of public sector, sport and law that we are finding that our clients find attractive, I think, as the industry professionalises.”

Across the world, however, a varied picture emerges. For every city with a well-tuned, finely honed event strategy there are others in increasing need of the kind of expertise The Sports Consultancy can provide. “You look at Event Scotland or Sport Event Denmark or Victorian Major Events Company and they have built, in some cases over decades, solid experience of hosting and maximising the benefits of hosting major sports events,” Buchanan says.

“They’re clear on what they want and they’ve built a staff with significant

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expertise in all aspects of hosting, from strategy through to bidding to implementation. You notice that in the way in which they approach a major sports event, either on an ad hoc basis or through a bidding process.

“There are other cities, particularly cities which are emerging and have aspirations to elevate their city on the world stage through hosting major events, who do approach it with a lack of expertise and a degree of naivety when it comes to dealing with, in some cases, sophisticated rights holders. I think they will always benefit at a basic level, both in terms of international exposure and economic impact, but I think they will not expect some of the more subtle benefits that can be expected in terms of legacies, sporting participation, the health agenda, stimulation of major infrastructure and leaving behind some significant

legacies. There is so much benefit for a city to expect from a major sports event it does take a degree of sophistication and solid expertise in how to unpick and unlock the full value of a major sports event.”

In an era when public spending is being scrutinised like never before, Datnow believes the need for companies like The Sports Consultancy is all the greater – be it for host cities preparing themselves to stage events or rights holders looking to place them.

“We have responded,” he says, when asked about the changing dynamics of the host city/rights holder relationship during an economic downturn. “When we’re acting for cities and rights holders we are responding to those things: the professionalisation of bidding and the additional scrutiny that is required by bidders and hosts to know what value they’re getting back.”

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THE RAPID EVOLUTION OF BIDDING Robert Datnow he relationship between the event owner and the host city has always been symbiotic. A host is much more than just an anonymous stadium or a venue for a sports event. Take the iconic Barcelona city backdrop of the 1992 Olympic Games, the cultural distinctiveness of Beijing, Sydney and London, and the historic resonance of Athens 2004.

These layered associations are the lifeblood of successful events.

Now, this symbiosis is evolving faster than ever; not only in hosting but also in the world of bidding. Host cities and rights holders are rapidly becoming yearround marketing partners.

The most successful events are those that work as well for the host as for the event owner; understanding this is key to delivering against it.

Bidding and securing venues also have this symbiosis at their core. A successful bidding process recognises the full extent of the host city’s and the rights holder’s ultimate objectives.

Sophisticated cities target events that deliver multiple sustained returns.

A sophisticated bidding process accommodates these strategic priorities for cities. Rights holders want more than just a perfect stadium and delivery partner. They also want public sector engagement; not just for municipal services and cast-iron performance and financial guarantees, but also strategic marketing partners whose interests are aligned with their own – aspirational cities with a destination and tourism marketing story to tell internationally, hungry to fill stadia, stimulate participation and fans in new markets and leave lasting physical and skills legacies.

Even in the 15 years we have managed bids for cities and secured venues for

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rights holders, bidding processes have rapidly increased in sophistication.

In the dozen or so venue selection bidding processes The Sports Consultancy has developed over the past eight years (for the likes of the America’s Cup, the Women’s Tennis Association, the International Equestrian Federation and the Volvo Ocean Race), we have tried to respond on behalf of our rights holder clients to cities’ evolving needs, and to use our knowledge of managing bids (Madrid’s bid for the Ryder Cup 2018) to equip bidders to make their own detailed analysis of potential returns on investment as early and often as is feasible.

We have listened to bidding cities over the years and we have innovated.

We have learned that: 1. Bidding cities want to know the full scope of their potential rights and benefits and the full scope of their delivery requirements near the start of the bidding process so they can budget, evaluate and plan accurately.

2. Local, regional and national political cycles significantly affect a city’s ability to commit beyond a term in office.

3. Bidders want credible, trustworthy and objective economic and media impact projections, from a reliable source, based on accurate data from previous events, from which they can carry out their own analysis. Politicians need ultimately to answer difficult questions about the scale and purpose of investing in bidding for and hosting sports events.

4. Bidders want guidance on operating costs from the rights holder, using data accumulated from previous hosts.

5. There are political risks as well as financial risks for bidders. They want reassurance that the bid process is fair, methodical and transparent and that all candidates will be treated equally, using

published standard evaluation criteria.

6. Bidders want to interact with rights holders and do business face to face.

7. Bidders do not want to be overwhelmed all at once at the end of a bidding process with a mountain of questions, requests for information and unexpected commitments.

Increased sophistication is a natural evolution for any industry as it matures.

However, several factors have fostered the development in bidding over the past ten years.

Firstly, the International Olympic Committee’s 2000 reforms, issued after the contentious battle for Salt Lake City, 2002, have become a paradigm in terms of bidding rules, requirements, documents and evaluation.

Secondly, the global economic crisis.

Post-2009, there is a greater squeeze on public sector budgets and unprecedented scrutiny into the spending practices of local, regional and national governments.

Thirdly, there is the proliferation of major sporting events. With more choice for cities, rights holders need to differentiate, to provide more certainty on investment return and media reach, and to secure multiple hosts, many years ahead, before city calendars get overcrowded. However, procuring events up to seven years out has two major impacts: the difficulties in future-proofing, and the need to fix prices at today’s levels but in anticipation of changing economic conditions.

Meeting these challenges, finding commercial solutions, and adapting bidding processes to the growing sophistication and accountability of bidding cities are vital for rights holders and the lifeblood of an agency like ours.

Robert Datnow is managing director and co-founder of The Sports Consultancy.

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Delivering Business Solutions in Sport Brands - Host Cities - Rights Holders - Venues

www.thesportsconsultancy.com Contact: Angus Buchanan/Robert Datnow Address: The Sports Consultancy, 81 Gower Street, London, WC1E 6HJ - Tel: +44 (0) 20 7323 0007 - Email: info@thesportsconsultancy.com

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