Sponsorship News

So what’s going on with sports sponsorship? It seems, given the current economic climate, that a number of companies are withdrawing their support for sports teams or leagues. Below are some of the main movers and shakers:

•  ING (the Dutch based bank and insurance company) confirmed that they will not renew their three-year sponsorship contract with Renault F1 and will end their presence in F1 beyond the 2009 season.  http://www.telegraph.co.uk/sport/motorsport/formulaone/renault/4641581/Renault-lose-ING-sponsorship.html
• RBS have also withdrawn their £20m F1 sponsorship deal from 2010 (although this is hardly a surprise given the bank’s recent financial meltdown). Although more controversial was Sir Jackie Stewart’s refusal to renegotiate down his £4m per year contract as ambassador for the bank (http://www.telegraph.co.uk/sport/motorsport/formulaone/4807981/Should-Sir-Jackie-Stewart-take-public-money.html )
• Williams are doubly hit though, in that one of their other main sponsors was Icelandic investment firm, Baugur, which collapsed under the weight over its debt. http://www.telegraph.co.uk/sport/motorsport/formulaone/williams/4807378/RBS-abandons-Williams-as-Honda-find-hope.html;
• BMW-Sauber’s partnership with the Swiss Bank, Credit Suisse, has also ended (although it has now been replaced by leading currency exchange broker, FxPro). http://www.f1network.net/main/s491/st141065.htm
• Anheuser-Busch (the world’s biggest brewer and supplier of Budweiser) will discontinue its sponsorship of the National Hot Rod Association, and its 30-year sponsorship of  the Kenny Bernstein Racing team. According to IEG research, in 2007, the brewer spent an estimated $360-365 million on sponsorship! http://www.reuters.com/article/sportsNews/idUSTRE52G3V720090317
• General Motors (the US carmaker) is launching a major cut back of its support of NASCAR, in particular, the Associated press reports that teams in the top-tier Sprint Cup series, the second-tier Nationwide Series, and the Nationwide and third-tier Camping World Truck Series will all lose funding. http://www.sportbusiness.com/news/169684/nascar-braces-cut-gm-support
• NIKE withdrew three athletes (Kelly Sotherton, Hannah England & Greg Rutherford) from the inaugural Super-8 Athletics event in Cardiff in a row over logos and kit (more detail to follow on the blog next week). http://www.sportbusiness.com/news/169627/sponsorship-row-ruins-uk-athletics039-super8
• The US PGA Tour had to reduce its prize money for the St.Jude Classic Golf tournament in Memphis from $6.1m to $5.6m after Stanford Financial Group cancelled its title sponsorship of the event following the arrest of its founder, Allen Stanford. http://www.sportbusiness.com/news/169605/pga-tightens-purse-after-sponsor-pullout
• The New Zealand PGA Championship tournament is seeking a new title sponsor after the HSBC banking group decided not to renew its agreement,  http://www.sports-city.org/news_details.php?news_id=8167&idCategory=31
• Garnier (part of the L’Oreal Group) has discontinued its sponsorship of the Australian Open Tennis in Melbourne. The event has also lost deals with GE Money and Mastercard, although its headline sponsor, KIA Motors is committed until at least 2013. http://www.sports-city.org/news_details.php?news_id=8120&idCategory=31
• Car maker, Volvo has withdrawn from the Asian Golf tournament in Bangkok this December, causing the event to be removed from the calendar. http://www.sports-city.org/news_details.php?news_id=8070&idCategory=31
• Although Virgin were announced as sponsors of Brawn GP, it may be that this sponsorship deal will not be renewed next year. The Virgin owner, Richard Branson, suggested recently on Radio Five Live that this was because the value of Brawn when they agreed this year’s deal was next to nothing, and now Brawn’s value has shot upwards of £50m, Virgin would not be able to afford a new deal with the team. http://www.guardian.co.uk/sport/2009/jun/21/virgin-brawn-sponsorship-formula-one

It is not all doom and gloom though for sports teams as:

• McDonald’s has recently confirmed that it does not plan to cut its 2009 global sponsorship budget. Johan Jervoe (corporate VP for Global Marketing) explained that while the company was not looking to cut any existing deals, they would adopt a more strategic and focused approach in future to supporting teams or events. In 2007 though, the firm was reported to have spent $125-130m on sponsorship! http://uk.reuters.com/article/idUKN0945981520090309?feedType=RSS&feedName=motorSportsNews&sp=true
• Michael Phelps has signed his first endorsement deal since the infamous ‘bong’ photograph earlier this year, with San Diego-based H2O Audio (a maker of waterproof headphones and audio accessories) http://www.sports-city.org/news_details.php?news_id=8443&idCategory=31
• Although AIG gave notice of their intention to end their £56.5m sponsorship of Manchester United earlier this year (following the company’s $85m bailout from the US government), the Premier League Champions have now agreed a four-year shirt sponsorship contract, starting from the  2010 season with Aon Corporation (another American financial giant). The contract is worth £80m and represents the biggest shirt sponsorship deal in football history. Ironic, given the fuss that has been made following Ronaldo’s ‘excessive’ transfer to Real Madrid. http://www.sports-city.org/news_details.php?news_id=8290&idCategory=31

FINA tighten up swimsuit regulations

Source: http://news.bbc.co.uk/sport1/hi/olympic_games/7944084.stm; http://www.cbc.ca/sports/amateur/story/2009/03/14/fina-swimsuits-ruling.html; http://www.independentweekly.com.au/news/local/sport/swimming/rose-says-lzr-world-records-need-asterisk-attached/1397626.aspx?storypage=2

 

FINA (the World governing body for swimming) has met this weekend in Dubai to consider whether any changes need to be made to swimming regulations. The result was the Dubai Charter (this Charter can be downloaded from the FINA website: http://www.fina.org/project/images/help/the%20dubai%20charter.pdf)

 

The Charter opens by asserting that “FINA wishes to recall that the main and core principle is that swimming is a sport essentially based on the physical performance of the athlete…. FINA brings together athletes from around the world to compete on equal conditions and thereby decides the winner by the athlete who is physically the best.”

 

Before going on to revise and clarify many of the technical specifications for swimsuits:

·        Swimsuits should not cover the neck and must not extend past the shoulders and ankles (USA Swimming had earlier petitioned FINA to make this not below the knee)

·        The material should follow the body shape and not contain air-trapping effects

·        Maximum thickness of 1mm

·        Buoyancy effect of not more than 1 Newton

·        No pain-reduction / electro-stimulus or chemical release

·        Swimmers can only wear 1 swimsuit

·        No modification or customisation is permitted for individual swimmers

·        (From 01/01/10), Restrictions placed on the permeability of swimsuits (max: 50% of non-permeable material)

 

Any suits wishing to be worn at the World Championships in July need to be submitted to FINA by the end of this month for approval.

 

The impetus for these changes stems primarily from the 2008 season, when 108 world records were broken, 79 of them by swimmers wearing the revolutionary Speedo LZR Racer (including 23/25 records set in Beijing). Many critics argued that this amounts to ‘technological doping’ and that athletes wearing the LZR gain a significant advantage of those who do not. Indeed, Murray Rose (Four-time Olympic champion) argues that records set by swimmers wearing the LZR suit should be asterisked to distinguish them from the other ‘pure’ records.

 

That said though, given that a  spokesman for Speedo (manufacturer of the LZR Racer) is quoted as saying that,  “At this stage we are of the opinion the LZR Racer will be fine,”  do the FINA changes go far enough? It is true that the new regulations are certainly more transparent (not necessarily a good thing in a swimsuit!) and should enable suit manufacturers to predict with greater certainty whether their suits will pass the scientific testing put in place by FINA, a complaint made previously by some manufacturers. The fact that the swimsuits will not be customizable by individual athletes is also important as potentially this opens up the market (the argument that all we need to do is figure out which swimsuit Michael Phelps is wearing, buy that and voila a gold medal).

 

There are however two problems that remain, the first is that FINA have placed no limitations on pricing.  Potentially, while anybody could wear a $3,000 swimsuit, it is only the richer athletes / nations that can afford it. Indeed, similar arguments were made in Formula One which ultimately led to restrictions on testing and research budgets in order to allow smaller teams to compete. Not only would athletes like Eric Moussambani (nicknamed Eddie the Eel, who competed for Equatorial Guineau in 2000) be handicapped for not having swum in a 50m pool, but they would be at a double disadvantage if they could not afford the most expensive and technologically advanced swimsuit too.

 

 

 

 

The second problem will not be resolved until the summer, and that is FINA reserve the right to change their mind. If athletes in Rome swim too fast using the suits, all bets may be off and the regulations tightened ahead of the November 1^st deadline. Better wait a few months before you buy your suit for next year then……

Michael Phelps Finally Talks

The Globe and Mail

http://www.theglobeandmail.com/servlet/story/RTGAM.20090313.wphelps0313/BNStory/International/home

US Olympic swimming sensation Michael Phelps spoke publicly for the first time since the infamous bong photo was published last month and talked about his ‘stupid mistake’.  Mr. Phelps appeared sincere in apologizing to the public for letting them down.  Only a cynic would suggest that he might have also been motivated to control the damage to his reputation given that there are millions of dollars in endorsements which are at stake.