SPORTS MARKETING

Twenty20 report cover
ISBN: 978-1-905685-10-3
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Twenty20 Vision

Executive Summary

The report starts with a thorough listing and examination of commercial data in cricket. A comprehensive list of sponsorship deals for every governing body and professional club side globally is presented and analysed. The findings show that the leading industry sector investing in cricket is financial services.                   
TV Rights Growth

The key revenue driver for major professional sport is now television and, in many respects, this applies to cricket more than most major sports. The media has highlighted some of the very large broadcast rights deals for football (soccer) in recent years in particular. It should, however, be borne in mind that the television income for most major European football clubs represents less than half of their turnover and typically the amount is around 30-40%. Such clubs have other highly lucrative revenue streams, particularly from gate receipts but sponsorship, merchandising/licensing and hospitality can all contribute millions of euros per year.

The picture is slightly different for football’s governing bodies, which have fewer matches to host and rely more heavily on broadcast income.

Cricket has relied more heavily on broadcast revenues than most other major sports in terms of the proportion of revenues brought into the professional sport. The ECB’s latest £300m deal with Sky Sports followed an earlier £220m from the broadcaster. Given that its primary sponsors, nPower and Vodafone, were paying an estimated combined total of £8m per year, the value of television income is clear to see.

The revenue landscape has changed even more dramatically with $1bn deals for the Indian Premier League (IPL) and the Champions League for Twenty20 cricket.  One of the key issues of the report is an examination of the impact of such broadcast deals. What is the effect on cricket overall of money being disproportionately channelled into the shortest form of the game? And how will cricket continue to attract widespread interest if it is removed from free-to-air television?

Sponsorship

The financial services sector is by far the biggest sponsorship investor in cricket globally. But at a time when banks are under increasing financial and media pressure to reign in their expenditure, this will be of concern to rights holders. There is a strong argument to support sponsorship expenditure as a key business tool for banks, but the public perception of sponsorship remains that it is an unnecessary luxury, this is especially so where corporate hospitality packages are included as part of the contracts. Any bank laying off large numbers of staff can ill-afford to be seen having champagne receptions at prestigious sporting events regardless of the business case. It is, therefore, inevitable that expenditure from this sector will contract in the period between 2009-2011.

The second biggest sector is media, although the data is somewhat skewed by the ambiguous nature of media deals. Often what is reported as sponsorship is, at least in part, a media rights acquisition. Alcohol is the third biggest sector and is a large contributor to Australia and India in particular. Although of no immediate concern, the trend towards voluntary or legislative restrictions on alcohol promotion in many countries could spread just as has happened with tobacco.

The findings suggest that cricket urgently needs to broaden its appeal to sponsoring industry sectors to avoid being hit by spending restrictions in certain industries. For the image of the sport, it also needs to have a stronger appeal to new and dynamic businesses and business sectors. There have been some notable sponsorship deals in the telecommunications sector among national governing bodies, although England’s deal with Vodafone, for example, will not be renewed.

Overall, however, sponsorship of cricket has shown growth and the development of Twenty20 in general, and the Indian Premier League (IPL) in particular, has added new interest in the sport, which is also translating into sponsorship and commercial opportunities.

Cricket Attendance

One of the loudest mantras in professional cricket has been the call to stem the tide of falling interest and attendance in the face of competition from other sports and leisure activities.

Attendance data in world cricket is patchy with reliable historical data available only from Australia, England and the International Cricket Council (ICC). Such data actually shows that attendances for major series have not suffered severely in the past 20 years. In Australia, test and one-day international (ODI) series have fluctuated according the opposition, but recent peak attendances are similar to those of the early 1990s.

In England, virtually every tournament has seen a growth in attendance in the period 1998-2008. The Cricket World Cup has, overall, also seen a growth in attendance since its inception although spectator levels vary significantly depending on the country in which the event is staged.

Attendance at Twenty20 events has, of course, been seen as crucial to the future of cricket and crowds at such matches have been high with the IPL in particular generating huge interest.

The Development Of Twenty20

The report considers the origins of Twenty20 cricket in the English Cricket Board’s (ECB) desperation to arrest dwindling attendances for county cricket. The ECB marketing director in 2002, Stuart Robertson, discusses how he instigated a rigorous marketing campaign to find out what was putting people off cricket.

The research found that cricket’s narrow demographic largely excluded anyone but middle-class, middle-aged white men. Robertson explains how a short-form game resolved many issues of accessibility. In its first season, the Twenty20 Cup proved a huge success and continued to expand.

The Indian Premier League

The report then considers how Robertson’s revolution spread around the world, focusing first on IMG’s development of the Indian Premier League as an unashamedly commercial marketing concept. It looks at how sports marketing agency, IMG whipped up a frenzy of excitement around the IPL with auctions of players and franchises, and the shrewd use of celebrities.

The IPL’s financial deal with broadcaster Sony and World Sports Group are examined, as are the value of the franchises and sponsorship deals. The report considers how the IPL changed cricket demographics in India, how it became a focal point of social lives, and dominated TV ratings. Writers, sponsorship agents, and interested parties give their views about the IPL’s future.

There is an examination of how the Indian Cricket League (ICL) was born out of the desire of billionaire Subhash Chandra to get high-profile cricket matches on his satellite television channel, Zee Telefilms. A comparison is made between the popularity of the ICL and the IPL, and the likelihood of the ICL ever be sanctioned by the ICC is discussed.

Twenty20 And The ECB

The report then considers the impact of Allen Stanford on English cricket. It looks at how the big-talking Texan turned heads at the ECB because they wanted their own lucrative cash cow to prevent English players signing up with the IPL. Expert commentators provide their mainly scathing views of the ECB’s management of the affair.

An analysis of the arguments in favour of introducing a second Twenty20 tournament in England is introduced. Comments from three of the Twenty20 Cup’s four partners, npower, Totesport and Marston’s, illustrating how this young and dynamic form of the game can be a powerful tool for shifting brand image. The report examines the Englis

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