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COMMENT

10/1/2014

SportsPro, one of the industry’s leading business magazines and new site has released a fascinating document looking at the top 50 companies in the world of sport for 2014.
Obviously such lists will always attract a bit of controversy as there will be arguments in favour of companies outside of the list and questions regarding some of those in it. Overall, though it is a very thought provoking list in terms of not only the companies listed, but the criteria for selection.

GSK, for example, appears because of its role in anti-doping and BT, until recently barely associated with sport, has gone straight in on page 3 following its acquisition of English Premiership soccer and rugby and UEFA Champions League rights.

Interestingly it is broadcasters that come first in the publication and very significantly the majority of the names on the list are companies that most people wouldn’t have even heard of 15 years ago. América Móvil, Google, Twitter, Al Jazeera all feature prominently along with broadcasters from China and Brazil. There is no mention of the likes of NBC, BBC or Canal+ as new media and cable companies dominate the list. It demonstrates both the huge impact of both new technology and the rise of new markets with a strong appetite for sport.
Arguably the man to watch here is Carlos Slim, owner of América Móvil, which has both telecoms and media brands in Latin America. Reportedly the world’s second richest man, Slim has also bought into two soccer clubs in Mexico and his Claro and Telmex brands are major sponsors with rights including F1’s Force India and Sauber teams and domestic sponsorship of the 2016 Rio Games. As such Slim has media, sponsorship and team ownership rights and is well placed to expand internationally.

In the sponsorship industry, the agency list includes Japanese giant Dentsu, which is obviously well placed to benefit from Tokyo’s winning bid for the 2020 Olympic Summer Games and other majors such as IMG and TEAM Marketing. What is interesting, however, is the emergence of Infront China and Legends Hospitality.

Infront took basketball rights in China in a broadcast deal that raised eyebrows, but successfully sold the sponsorship package to Li Ning and has now established itself as a major player in the country. Legends, on the other hand, started in the stadium concessions and catering business but has now become a full-service agency handling sponsorship and media rights and looks set for continued growth and possible international expansion. IMG is included mainly as a result of its impending sale and the likelihood that this will lead to both change and further investment. Interestingly France’s Keneo gets in ahead of French marketing and media giants Lagardère and Havas, both of which have a significant international sports practice. Keneo was chosen mainly because of its technical assessment work for the IOC for Rio 2016, which in turn gave the company the expertise to help Tokyo win the 2020 bid.
Jay z’s Roc Nation Sports also features due to its partnership with Creative Artists Agency and the signing of basketball star Kevin Durant and NFL’s Geno Smith.

One interesting point here is that for the first time in a few years, the social media expertise of the agencies hasn’t been a key point of discussion. It suggests that the industry has to an extent at least, got to grips with social media and that the chance for outstanding innovation has largely gone. Knowledge of how to use Twitter, Facebook, YouTube, Google+ etc. has is now spread across all of the big agencies and is no longer a significant indicator of likely growth between the major players.

In terms of sponsors, SportsPro cites Samsung as a key player in the coming year. Apart from the company’s Olympic rights, it also has a significant international rights portfolio including Chelsea (well placed for silverware this season) and has a major new deal with the NBA, its first major partnership in the US.

Not surprisingly Coca-Cola and Emirates feature highly on the list. Coca-Cola has the benefit of rights to both Sochi 2014 and the Brazil World Cup, while Emirates has the latter and a huge portfolio across the globe to draw on. Nike is mentioned because of its deal with the Brazilian national team for the World Cup, although its association with Manchester United – a new deal is rumoured in the region of $100m per year – might not be quite the glittering showcase of previous seasons given the club’s current predicament. Arch rival Adidas also features, mainly because of its official partner status at the World Cup this year but also, like Nike, the company is expected to produce major technological innovations in its sportswear over the next year. With Warrior and Puma constantly snapping at the heels (pardon the pun) of these footwear giants, it will be an interesting year in this sector.

Interestingly SportsPro has also mentioned Heineken as a sponsor to watch. The brand has been phenomenally successful in activating its UEFA Champions League rights through the Star Player initiative, but can it have similar success in the USA, where it is the second biggest imported beer? With no major rights in the country, it is difficult to see how it will make an impact using sport at present unless a major deal is in the offing.

There are few rights holders on the list; AEG gets a mention partly because it is restructuring and looks set to pick up more business in China in particular. Maple Leaf Sports & Entertainment is there as a result of Tim Leiweke taking the reins and it is expected that his experience at AEG will yield dividends. Non of Europe’s soccer giants have been included, although Qatar sports Investments, owner of Paris Saint Germain, is on the list under ‘Finance’.

It is always stimulating to read such reports and it inevitably leads to one’s own predictions. With Sochi 2014 now past, all eyes are on Brazil and the FIFA World Cup. Which clubs and associated sponsors will prosper? IMR is predicting success for relative outsiders Uruguay and Colombia sponsored by Puma and Adidas respectively – it would be far too safe and easy to list the obvious: Brazil, Spain, Germany and Argentina.

In terms of sponsors from emerging nations, it is unlikely that those from India or Mexico will create global ripples just yet – their markets tend to be regional, but Turkish Airlines is an interesting player to watch as it is using sponsorship to help develop its global market.
To an extent, the major Brazilian brands have already made their impact in the run up to the World Cup and Rio 2016, where huge fees were paid for domestic rights. Political fallout over Ukraine could dampen Gazprom’s considerable sports marketing efforts in Europe and China’s emerging brands still haven’t really flexed their sponsorship muscle although Yingli Solar, which has rights to the FIFA World Cup, Bayern Munich and U.S Soccer, has a fantastic activation opportunity over the coming months.

Among western brands expected to do well from sponsorship are IBM, whose ground-breaking work in tennis looks set to continue and Castrol, which has a very experienced team to activate its World Cup rights. Visa and Coca-Cola will, inevitably, leverage their global rights to the full and it will be interesting to watch the social media output of both throughout the year. Visa’s output during Sochi 2014, generated a strong following, which is likely to be replicated in Brazil. It will also be interesting to see whether P&G and GE follow up their Olympic successes with wider rights acquisitions in the near future.

IMR specialises in bespoke research reports and commercial advice to rights holders
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