Friday 22 September 2017

Lions jersey sponsors triumph in the battle of the brands

Conor Murray scores against the All Blacks in Wellington. Photo: Stephen McCarthy/Sportsfile
Conor Murray scores against the All Blacks in Wellington. Photo: Stephen McCarthy/Sportsfile

Kelli Slattery

The Lions is recognised as one of the most desirable events to attend in rugby circles. But as a business, the British and Irish Lions really have a limited window to generate revenues to sustain the business model.

Their sponsors, who pay handsomely for the privilege of being associated with the team, really only have a six-month window every four years in which to activate their campaigns.

The total cost to send the British and Irish Lions on tour is approximately £14m (€15.9m), so the Lions commercial team must work hard to generate the estimated €45m in revenue.

Both players and home nations benefit, with any profits distributed back to the home unions with the aim of growing the game. Each of the home nations receive £70,000 (€82,400) per player who travels. Each player who finishes the tour will receive £70,000 (€82,400), plus a bonus of £10,000 (€11,777) should they win. This is a 40pc rise on what players who competed in Australia in 2013 received.

The Lions is operated by the British Lions Designated Activity Company, which is owned by the four home unions (Ireland, England, Wales, Scotland). British Lions Limited does not retain any profits. Any surplus generated is directed back into the funding and development of the sport via the four unions, which are the shareholders of British Lions Limited.

The host nation benefits from the tour every 12 years but it is a very worthwhile benefit and it is extremely lucrative to host the Lions. All three SANZAR nations budget for the tour and it is an essential part of financial planning and the business model. Hence the vivacious appetite to support it from both sides of the equator.

The successful tour to Australia in 2013 was reportedly worth in excess of £40m to the ARU, which assisted in wiping out their reported debt at the time of £12.2m. When the Lions last toured New Zealand in 2005, the value of this was an estimated NZ$21.5m to the host union and 2017 is expected to generate far in excess of this, which will easily clear the NZ Union's current debt of NZ$7.5m (€4.8m). The overall economic benefit for the New Zealand economy of some 35,000 traveling fans is also expected to be significantly higher than the £140m generated in 2005.

Although the Lions go back as far as 1888, no tour before 1991 was profitable.

The real turning point came eight years ago, when the team visited South Africa and their earning powers have gone from strength to strength ever since. The professionalisation of rugby and the subsequent increased commercialisation of the game, including an exponential rise in TV and sponsorship revenues, is the primary factor.

To achieve such strong sponsorship revenue, the Lions have a tiered structure. The clear benefit of this model is that the Lions can command significant sums of money from brands that benefit from varying levels of rights in different markets and with varying business objectives.

The Lions sponsorship architecture consists of six principal partners (Standard Life Investments, Canterbury, QBE, Land Rover, Qantas and EY), four sponsors (Pink, Mud House, Gillette and Robert Wallace), one regional sponsor (Doom Bar), five suppliers (Vivomed, Rhino, Whyte & Mackay, PBS and Slingsby) and one media partner (The Telegraph).

In the cluttered space that is sponsorship and a short window of available time in which to activate it, it can be hard to get cut-through.

To ascertain the levels of success in this market, Teneo PSG conducted research amongst 400 Irish sports fans over the age of 18, to see which sponsors were making an impression during this tour. The research was conducted at the outset of the tournament and checked again in the days following the second test to establish the impact that the games have had on sponsor awareness.

The results prove the power of television and wall-to-wall media coverage in driving sponsor awareness and the significant benefits for a brand appearing on the front of jerseys. The fact this is an 'odd' year, with no Euros or Olympics or World Cup, gives the Lions tour a fairly clear run.

The winning brands from an awareness perspective are, unsurprisingly, those whose names are on the Lions jersey; Standard Life Investments and Canterbury.

Standard Life Investments is emblazoned across the chest as the main sponsor, with the Canterbury name appearing on the upper right-hand side of the jersey, as kit supplier.

The trends are definitive and Standard Life Investments' 'prompted' awareness (where the name is listed and the respondent is asked whether or not they associate the brand with the sponsorship) jumps from 75pc to 84pc. Their unprompted awareness is a further pointer of the success of this sponsorship awareness jumping from 31pc (before) to 42pc (after). When you consider the prominence of HSBC and Zurich as previous partners, this is an excellent result.

Other Lions partners that can be happy with their lot include Land Rover, with 66pc prompted awareness after the Second Test, Gillette (44pc) Qantas (35pc) and EY (26pc).

While they all had varying sponsorship objectives such as hospitality, those who had deeper rights and active campaigns tended to do better.

Equally, when examining partners of the host nation, an incredible 88pc of sports fans could name AIG as partners of New Zealand rugby when prompted ahead of the competition, while this rose to 92pc after the second test.

We must acknowledge that, with the GAA season being under way here, the fact that AIG is jersey sponsor for Dublin GAA makes the brand familiar in this territory and may have assisted in recall and recognition. The long and successful association with the All Blacks gives an added advantage. Adidas, manufacturers of the All-Blacks kit, also had 74pc awareness prompted.

Broadcaster Sky scored very highly with Irish sports fans as rights holder and its non-stop promotion and coverage have paid off.

Secondly, the significant promotion of the tour by RTE radio and online, who had exclusive rights to the tour here in Ireland, ensured that interest continued to be stimulated at every stage. Of course, the strong Irish representation helps.

Our judgement is that The Lions tour of 2017 is a long way from the end of the Lions. It's just too big a brand and too big a money spinner for the host nation and northern hemisphere stakeholders to be allowed prowl away into the sunset.

Sponsors can expect to have the Lions as a major brand with which to partner their brands for some time to come. The money machine rolls on.

Kelli Slattery is managing director of Teneo Sport, Ireland's leading sponsorship consultancy and member of the Teneo PSG Group

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