Sponsorship of sports events is big business
The Barclays Premiership, Dubai Duty Free Tennis Championships, Flora London Marathon… they slip off the tongue without a second thought about the name, proving the companies attached to sporting events have achieved their goal.
But these associations come at a price.
The sponsorship of sporting events, whether they are leagues or cups, has been going on for decades. In 1957, the Whitbred Gold Cup was the first event to be associated with a brand in the United Kingdom. Fifty years on, sports sponsorship was worth $9.3 billion (Dh33.84bn) last year in Europe alone, according to a recent report published by International Marketing Reports. This massive figure equates to a growth of 37 per cent since 2000.
The Driving Business Through Sport 2007 report also concluded Germany was the biggest market for sports sponsorship, accounting for 33 per cent or $3.56bn (Dh13bn) of the total, with the UK in second place with 17 per cent or $193bn (Dh708bn).
Multinational companies are in on the act, too, including Coca-Cola, which sponsors The Football League in England, proving it is not just smaller firms looking to tap new markets who invest in such deals.
In the Middle East, the market is not as established, but there are still a number of companies investing in the sponsorship of sports events. The Dubai Tennis Championships is the most famous example and have been owned by Dubai Duty Free (DDF) since 1983. Indeed, such is DDF’s commitment to the event that it paid for the construction of the Dubai Tennis Stadium in Al Garhoud to give the championship the showcase venue it craved to put it on the international tennis calendar.
Being associated with the tennis brings DDF benefits far beyond the millions of dirhams it spends each year running the event, from paying umpires and medical staff to covering hotel bills and plane tickets for the players. It is now the richest event on the circuit thanks to this year’s prize money being increased to $1.5 million for both the men and women’s weeks and was the first tournament outside the US and Australian Opens to have equal prize money. Thanks to this, next month’s championships will attract nine of the 10 best female and all 10 of the best male players in the world today.
SPREADING THE WORD
For Colm McLoughlin, Managing Director of DDF, all this helps get its name around the world. “One of our duties with tennis is to promote Dubai around the word. We had 130,000 spectators at last year’s tournament and with the media coverage we receive, it helps bring exposure around the world. The match we organised for Roger Federer against Andre Agassi on the helipad at the Burj Al Arab was watched by half the planet, which all helps,” he says.
“World Travel magazine voted Dubai Duty Free the best in the world, which was the first time we cracked the US market, and the tennis helped with that.”
But DDF has not kept its sponsorship to tennis alone, for it has also backed skiing and snooker tournaments in the past. “We decided that sport was a good thing to be involved in from a sponsorship point of view, but we can’t do everything we’re asked,” adds McLoughlin.
This year has seen a development in sponsorship of the Dubai Tennis Championships as Barclay’s bank came on board in a $9m (Dh33m) three-year deal, which has helped propel the coffers of the event.
The UK-based bank is no stranger to corporate deals, having being the title sponsor of the English Premier League football for seven years. The Barclaycard three-year deal, signed in 2001, was worth $95m. When Barclays signed its current deal last year, they agreed to pay $130m (Dh473.8m) over a period of three years, but moving into such deals in Dubai represents a new avenue for the company.
Amin Habib, Barclay’s Managing Director for the UAE and Gulf says: “We have a strong association with sports, not only with the Premier League, but with golf in Singapore, too. Tennis is a global sporting event, which has big visibility across the world, so when we look at this region with events that have that, the Dubai Tennis Championships stand out.”
Sponsoring a sports event can provide companies with the ideal platform to establish themselves in new market and is just the case for Emaar-MGF, which is the title sponsor of the Indian Masters golf tournament that takes place in New Delhi from February 7-10. The event is part of the European PGA tour and as such will bring some of the sports top names to India for the first time. The firm is a joint venture between the UAE’s Emaar and Indian development firm MGF and was established in 2005.
The Emaar MGF Indian Masters was established through a number of organisations working together; the sponsors were looking for an event, tour organisers wanted to expand into India, the Professional Golf Tour in India wanted to aid its members and promoter Golf In Dubai was keen to add to its portfolio. However, it will be the players themselves who will gain most from the event. Not only does it increase their potential to earn prize money but also local players will get the needed exposure.
Golf In Dubai’s Marketing Manager, Michael Galasso explains: “There is an agreement that says 25 spots are for Indian players, which is just more than one quarter of the total places, which is good because it gives opportunities to the best players to play at the highest level and may be it could produce the next Tiger Woods.”
Organisers believe now that the first tournament is ready to begin, it will open the door and India could become a major player thanks to its growing population, which in turn gives the country potential from a sport and business point of view.
Even though brand awareness is important, as with any business deal, sports sponsorship ultimately comes down to money.
The Dubai Duty Free not only invests in bringing players to Dubai, but also sends staff on umpiring and medical training in order to reach an international standard, which is probably more than many sponsors do.
However, as Habib confirms, no company would invest millions of dirhams on something they will not expect a number of returns from. “We will recoup our money in more than one way. It’s not just financial, but a statement of intent in the Middle East.”
Follow Emirates 24|7 on Google News.