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The Panel Giancarlo Bernini Head of Global Sponsorship, Sony Mobile Communications Giancarlo joined Sony Mobile (then Sony Ericsson) in March 2011. He manages the company’s global sports sponsorship strategy across football – including the FIFA World Cup – in addition to tennis and extreme sports. He was previously marketing planning director for VISA Europe. Paul Smith Founder and CEO, Repucom Paul established Repucom in 2004, having founded Total Sport & Entertainment in 1994 to represent and handle sponsorship activation for brands. He is a graduate of the University of Canberra and was previously director of marketing for the PGA of Australia. Patrick Nally CEO and Founder, West Nally Patrick founded West Nally with sports broadcaster Peter West in the 1970s, the agency through which he helped create the blueprint for FIFA’s current sponsorship strategy by signing Coca-Cola as the World Cup’s first primary sponsor in 1978. Andrew Walsh Global Director, Enterprise Services, Repucom Andrew works across Repucom’s top clients, and has played a key role in the winning and development of the company’s accounts with UEFA, FIFA and the English Premier League. He has also won significant business with a number of blue-chip international brands.
THE GLOBAL The world has been relishing football’s showpiece event in the sport’s spiritual home ever since FIFA awarded the World Cup to Brazil seven years ago. Ahead of the first match this month, leading commentators in the sports industry came together at SportBusiness International headquarters to join Matt Cutler and discuss the commercial health of the FIFA World Cup, where it sits in the hierarchy of major events in sport and whether social issues in Brazil could hurt the brand going forward. How healthy is the FIFA World Cup from a commercial perspective? Patrick Nally: It’s going extraordinarily well. Other than the political situation in which FIFA finds itself in Brazil, the World Cup just grows and grows. [FIFA secretary-general] Jérôme Valcke says FIFA will break through the $5-billion revenue barrier during the next fouryear cycle. It is having other issues that need to be addressed – governance for instance – but from a commercial and marketing point of view, there is no other parallel in sport. It’s in a class of its own. Matt Cutler: What about compared to another huge major event, the Olympic Games? PN: The Olympics are not generating the same revenues as the World Cup. Football or soccer
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is the sport that is accepted over the world. And it doesn’t look like it’s dropping back, its only going to get bigger. Paul Smith: All the consumer research data over the last few years has shown a gap between the World Cup and other events. The World Cup builds upon football as a game; FIFA are the stewards of the game globally, but leagues like the English Premier League and the German Bundesliga continually reinforce that position. Every week, people are watching the high-quality product. That’s not the same with the Olympic Games, where the reality is the majority of people only see a sport like archery every four years. There is also the football product at the Olympics Games – the sport’s DNA runs through everything, it’s a phenomena. MC: How has this happened? What are the key
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AL GAME Every four years the granddaddy of them all comes around, and this year the stars have truly aligned factors behind the success of the World Cup? Is it all down to FIFA? PN: I think it comes down to football being accepted as the global sport. Going back to the early days of FIFA’s development programme, when [president] Sepp Blatter joined, the whole ethos was to grow the game in Asia, Africa, the United States, Japan…I think the impact of that over the years has seen football become, without doubt, the number-one global sport in the world. Look at the professional leagues of America, that have looked to take their sports to the world – they’ve had mixed success. No other sport can go over the globe like football. MC: Just to play devil's advocate here – the World Cup is only a quadrennial event. And it’s only a month long. Isn’t a better investment, for a broadcaster or a sponsor, something
like the Premier League, which has a global footprint and takes place across a significant part of the year?
the stars have truly aligned with football back in Brazil, its spiritual home. It’ll be an unprecedented spectacle for the world.
Giancarlo Bernini: It depends on your objectives. At the end of the day, I still think as a major sporting event, the World Cup is unparalleled. Yes, the Olympics are huge, but for a brand, you get that immediate recognition with the basics that come with your sponsorship package. Then there’s pitch signage which you don’t get at an Olympic Games – the clean venue means it’s much harder for a sponsor to raise awareness. I agree with Paul – you have domestic leagues, continental leagues, continental tournaments… all of these events are carrying on and creating that ‘always on’ for football around the world, which means every four years the granddaddy of them all comes around. And this year
PN: Football has a pyramid structure that the Olympic Games don’t have. All of the national federations and their leagues fit neatly into a structure under FIFA. That’s why the World Cup has so much support – it sits at the top of the pyramid. MC: We’ve talked a lot about how strong the World Cup product is. Is there any downside? PS: The issue now, I think, is how big football and the World Cup can get, and whether or not it over-prices itself. Throughout my years in the industry I have seen instances of sports over-pricing themselves out of the business, killing the goose that laid the golden egg. The SportBusiness International • No.201 • 06.14 37
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FIFA can’t just plonk the World Cup wherever it wants and think it’s all going to be fine NFL (National Football League) and MLB (Major League Baseball) are in that situation at the moment, where people are saying it is too expensive to take kids to see a game. PN: Social issues are also coming into play – social media means people in Brazil can complain about hosting the World Cup in the context of not spending money on hospitals. Future hosting of the World Cup might change because of that. It has totally shaken FIFA to the core, because it has never happened before. The FIFA structure isn’t geared to react to social unrest in a country where it has no control or influence, and it has woken up governing bodies like FIFA to the fact that they need to rethink how events are placed – Russia and Qatar would never have been given the tournaments they have [World Cups in 2018 and 2022 respectively] had this happened prior to their proposals. You can’t rewrite history and they have locked themselves into an issue that won’t go away. MC: Are brands affiliated with the FIFA World Cup following this quite closely? GB: It’s not something we can really comment on too much because, in many ways, it is out of our control. We signed up as a sponsor in 2007 and you don’t know where the World Cup is going to go in the next cycle. Yes, it’s a concern for us, but we have to leave it in FIFA’s hands as the organising body. PS: There’s no doubt it will have an effect on the brand of the World Cup. But the issue is whether or not in Brazil it is domestic and social issues or anti-football issues. If it’s anti-football sentiment then it’s more closely aligned to the issues FIFA needs to deal with. We’re making some enquires in our network at the moment about getting to better understand the Brazilian sentiment towards the World Cup – are these just vocal minorities? PN: But that means FIFA has to change for the future. FIFA can’t just plonk the World Cup wherever it wants and think it’s all going to be fine. And what’s happening for the football legacy in Brazil? There’s still no ‘Premier League’ there and the domestic game is nowhere near where it should be compared to Europe. 38 SportBusiness International • No.201 • 06.14
PS: This reaches into the administration of sport. We’ve mentioned governance, transparency…things are rapidly changing. But the tide is not rising at the same speed across the world; I’ve spent a fair amount of time in Brazil doing business and we are right in the middle of it from a research perspective – we operate in 22 countries around the world and I see the patchiness of business sophistication. I still scratch my head trying to understand the layers of Brazilian football and how the competitions work. Andrew Walsh: The dangerous thing for the FIFA brand is as soon as they move out of Brazil, they have Russia coming up followed by Qatar. With the social media buzz and increasing public interest around the event, you have problems stacked up until 2022. There’s no ray of sunshine coming up. The event always happens in the end, no matter how much people write about venues not being ready a week before it is scheduled to happen, but now people are talking about problems for 2022 already. What is the benefit of a brand becoming an official FIFA World Cup sponsor? GB: It’s the legitimacy of being able to associate with an event that no other brand can. Yes, other brands can get exposure through ambush and guerilla marketing, but for us the breadth of our exclusive sponsorship category is very powerful. Owning the ‘digital life’ category means that across all consumer electronics we can promote our services and really position ourselves in front of the fans as the official sponsor of the World Cup. MC: And the global footprint? GB: Yes, it’s huge for us. Across smartphones, second-screening will be huge this year, people watching coverage on the go…it’s going to be a big step-change compared to previous World Cups. But it’s competitive – every brand sees the World Cup as an opportunity to associate itself with what’s going on with the event. PS: Would you say that it is very difficult to build a global guerrilla campaign around the World Cup? PN: Global? I’d say it’s almost impossible.
AW: Our research shows that only two brands compete with the official sponsors on an international level – Nike and Pepsi. PN: It’s interesting because in creating the first package in 1978, Coca-Cola funded us to get the rights back for FIFA [ for 1982] because they obviously saw the power of football even then. In 1982 quite a few sponsors signed, including Coca-Cola, despite incredible increase in financial commitment. They are still there today; they aren't the kind of companies who would stick at it if it didn’t do something for them. The difference is FIFA and the World Cup are very commercial, and as more time has gone on, the more sought after the official partnerships have become because they give that credibility and authenticity. FIFA sponsorship has an incredibly wellpackaged, prepared and protected structure that is difficult to take on even with ambush marketing. It’s a great commercial proposition. AW: It’s also cheaper – if that’s the right word – to build a global campaign at an international level if you are an official partner than if you aren’t. PS: I also believe consumers filter a lot of the unofficial stuff out. If someone is really out there trying to pose as an official partner, they get found out, and they damage their brand…I think young consumers are about authenticity. You see that when sponsors change their football shirts – sales spike because kids want the real thing. And that benefits sponsors. GB: That goes back to the earlier point – it’s not enough just to be a sponsor, you still need to integrate and work it into as many areas as possible all the time. On it’s own it’s not enough, it’s just a logo. MC: Giancarlo, how is Sony’s activation different for the 2014 World Cup to the 2010 edition? GB: I was at another brand in 2010, but what I have noticed is content and social media is so much more important. On the content side we talk about sponsors, but broadcasters hold a lot of power as media rights-owners. Where you can align and work with broadcasters is incredibly powerful – and social media enables
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you to do so much more in such a short amount of time. PN: Fanfests too. At UEFA Euro 2012 there were 7.7 million in the fanfests across Ukraine and Poland, but only just over a million in the stadia. The engagement through fanfests and other ways of gathering people together to watch major sporting events has changed. Technology is going to go even further – Sony was a partner of the Japan bid for the 2022 World Cup and the ethos of the bid was future technology and showing matches in real-time, in stadia, through virtual hologram techniques (see pages 28-29). GB: But rights-holders still have a way to go in terms of opening up and embracing social media. The ones that do will get quicker wins, and the ones that don’t will struggle. PS: We saw how technology nearly brought the music industry down; the music industry had to redefine and reinvent itself. Sport hasn’t quite gone that far yet, but it could be beneficial. GB: Finding the line between the sponsor rights and the media rights in the future will be tricky. Sponsors pay a lot more for the rights. PN: Do you think sponsors should therefore be more involved as a stakeholder in the event?
GB: Absolutely. PN: I don’t think FIFA can leave it to 20 or so committee members to make its major decisions anymore. The sponsors, broadcasters, academics have to become involved in that debate or discussions so the asset is protected. The asset doesn’t belong to 20 or so FIFA members, it belongs to the people. The governance change, I don’t think, will come from the likes of FIFA and the IOC (International Olympic Committee), other people will come up with the plans and encourage them to buy into it. GB: It’s about the people who are keeping afoot with the changes in the industry. Is TV still king when it comes to the consumption of the FIFA World Cup? GB: The whole second-screen area is fascinating for us. Whether it’s in-game betting, social media with friends, fantasy gaming…it’s huge. But technology is moving at such a pace for people looking to watch the game. You don’t have to be at home, you can watch it on the go. You see broadcasters opening up their channels across a variety of platforms. This will be the first World Cup where you will see technologies being hugely important to fans looking to consume the tournament live.
PN: And it is that change of protocol that means TV rights, like sponsorship, go up and up. You look at markets like China, the rights values for the World Cup in China are enormous because they are very sophisticated with their IPTV penetration and have millions of people programmed in through telcos. The ability to exploit the rights though broadcasters has grown and grown, so the value is huge. Where you thought broadcast rights would decline, they haven’t; in fact they are going up. The product hasn’t changed too much, but the people buying it have. GB: TV will still dominate the consumption of this year’s World Cup, for sure, but I think you will start to see the use of the second screen – smartphones and tablets – really increase to previous events n
Lots more was discussed that we weren’t able to fit into the pages of the magazine. As a subscriber to SportBusiness International, you can exclusively access audio and video content from the roundtable using the following link http://bit.ly/1jxWAdJ or QR code
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