The recipe is simple. Take the world’s most popular sport in a market primed for growth, get in while the sport, the broadcast market or the economy more generally is underdeveloped, invest in long-term partnerships with local federations and companies, sit back and wait for the money to roll in.
It’s being tried by sports marketing agencies including Sportfive, the global media and marketing rights-holder for this month’s Africa Cup of Nations tournament; World Sport Group, the global commercial rights partner of the Asian Football Confederation (AFC); and IMG, which has created long-term partnerships in Chinese and Indian football.
But the road to profit can be a long and risky one. Clubs and federations are more than happy to take the marketing dollar, but local media may portray the marketers as exploitative neo-colonialists.
Sportfive’s deal with the Confederation of African Football (CAF) is a case in point. Ahead of last year’s Cup of Nations, the agency was portrayed as greedy in several African countries, as it sought to extract what it considered to be the market value of the media rights to the tournament.
Botswana’s minister of presidential affairs and public administration, Mokgweetsi Masisi, attacked Sportfive in the country’s parliament in December 2011. “The ability of (public-service broadcaster) Botswana TV and similar broadcasters across the continent to obtain rights to the tournament has – from the beginning – been compromised by the crippling financial demands of Sportfive,” he said.
Much of the criticism overlooked Sportfive’s commission-based contract, under which it takes a cut of the television rights fees but passes up to 90% of the income back to CAF, for redistribution to its member federations.
A similar fate befell World Sport Group last year when the agency was criticised by the national broadcaster of Iran for the prices asked for World Cup qualifier matches in the country.
The healthy profits the agencies are both thought to be making on their deals will soothe the pain of the criticism. Neither is likely to cut and run anytime soon. Longevity, in fact, is very much the name of the game.
Sportfive’s relationship with CAF stretches back to the early 1990s (the commercial rights were originally held by Groupe Jean-Claude Darmon, and were folded into Sportfive’s portfolio when the agency launched in 2001) and its current deal runs until 2016. World Sport Group has been the marketing partner of the AFC since 1993, and its current deal runs until 2020.
IMG realised it had to play a long game when it took up the challenge of helping put Indian football on the map. It embarked upon a 15-year deal with the All India Football Federation in December 2010, in a joint venture with giant Indian conglomerate Reliance Industries. IMG-Reliance set themselves two targets: to improve the dismal world ranking of the Indian national team, and to overhaul and re-launch the top-tier domestic league, the I-League.
If the challenge of promoting football in a cricket-obsessed country is not quite insurmountable, it is certainly proving a longer, harder trek than some had imagined. Last February, IMG-Reliance announced a delay to the overhaul of the I-League in the face of club opposition. In September, the Indian newspaper The Hindu claimed that the relationship between the federation and IMG-Reliance had become strained and that the federation was looking to get out of the deal.
IMG is likely to see a much quicker return from Chinese football, where last year it signed a 10-year commercial partnership with the Chinese Super League. Chinese football is enjoying something of a boom, with the country’s new billionaire class queuing up to own clubs and buy top players and coaches from Europe.
Jeff Slack, the senior vice-president for global business development, football, at IMG Worldwide, explained to TV Sports Markets some of the key underlying differences between the two countries.
He said: “In China, good infrastructure is already in place. Football is the most popular sport and more wealthy individuals are seeing the opportunity of acquiring a Super League team to use it as a PR vehicle. They will spend more money than the club will ever be able to generate. This is great for supporters, as the league will increasingly be able to attract more top football players from around the world as it pays higher wages.
“India is a far more dynamic media market and a precedent has been set with the successful Indian Premier League (cricket) franchise model. However, India is far behind China in terms of infrastructure, and a culture of football and players.”
IMG may have to wait in India, but Sportfive and World Sport Group have demonstrated that the long game can be a successful one.
This is a personal perspective of Frank Dunne, editor of TV Sports Markets.