On 8 September, the Lewis Silkin Sports Business Group hosted its latest forum event, “The winning formula: sports as brands”, at which our esteemed panellists provided real insight on what makes a sports brand successful.
They were joined by:
- Bill Sweeney - CEO, British Olympic Association;
- Hussein Fahmy - Head of Legal and Commercial Affairs, Team Sky; and
- Luisa Fernandez - Managing Partner, BBH Sport.
Although the forum was hosted on a Chatham House Rules basis, given the positive feedback received we wanted to follow up by capturing some of the key points concerning:
- Scandals and threats
- Social issues
- Athlete power
- Grass routes
- Handling a crisis
Scandals and Threats
In recent times, the sports industry has been overshadowed by a number of negative stories, ranging from corruption, to doping, to fears over nations’ abilities to host major tournaments (just consider the empty seats at the Rio Olympics). These are all fundamental issues that require global cooperation to be addressed, however the view from our panel was that sport remains remarkably resilient with such stories having little tangible damage to fan engagement, or performance on the field of play.
In perhaps the biggest corruption story of them all, FIFA’s on-going tribulations have shown that there is a separation between what is being sold and who is selling it. The fans’ passion for, and therefore value (both commercial and otherwise) of, football, remains - despite the organisation’s deep-rooted troubles.
Meanwhile, Team Sky has continued to distinguish itself by trading on its “clean rider” mantra. To prove that a cycling team can be highly successful, without doping, was an opportunity that Team Sky has grasped to its huge benefit.
Sports cannot be complacent. The demands of sponsors are becoming more sophisticated and there are endless sponsorship opportunities to choose from, with brands increasingly seeking out alternatives to sport such as music and food events and community initiatives.
Use of social media by athletes is one of the on-going issues which sports teams and bodies (as well as most employers) are currently grappling with. The potential impact of a tweet gone awry on a brand’s value or key marketing message is well known – as is the positive value in having a brand endorsed by an athlete to their affiliated social communities. There is a fine line to be trod between the authentic voice of an athlete (which might well be controversial) and commercially censored content.
In the context of Lochte-gate, Team GB were seemingly remarkably well behaved – both on the ground and in the “Twittersphere”. The appointment of “Road to Rio Ambassadors” provided much needed guidance to the younger athletes and the team’s culture was helped by key senior athletes demonstrating immense pride in representing their country.
The flip side of this is the risk that athletes’ use of social media can be so bland and “on message” that their personalities get lost. Consumers want authenticity and to be spoken to in their own language. Usain Bolt’s all night partying in London after winning the “triple triple” might not be up every brand’s street, but some may be of the view that at least you know what you’re getting.
It was acknowledged by the panel that there certainly remains value in not sharing everything on social media. Team Sky are open and transparent but also try to keep some intrigue and mystique around their brand, leaving fans asking “how do they do it?” This has the effect of leaving fans wanting to know more, particularly in the context of innovation and achieving marginal gains, and adds to the team’s appeal.
The panel also reflected on the value which sports brands and individual stars provide to large social media platforms, often for no return. Sports of all stripes spend fortunes building loyal communities – then encourage them to interact in a third-party digital space, with the providers of those spaces then able to monetise these communities. There is a real danger that sports, brands and athletes become reliant on these third party platform providers, while having no access to their own communities’ commercial value.
The market is slowly changing, with, for example, tie-ups between Facebook and College Football, and Twitter and the NFL. However, the model will undoubtedly need to adopt more ambitious change in the future. It’s possible that the biggest brands and talent, with their significant audiences, will flex their power, either individually or collectively, and secure a more viable relationship or, indeed, create their own platforms.
Teams and sports more generally have to get the balance between utilising the power of individual athletes and detracting from their own brand.
There are practical issues to this. Firstly, a team or sport will outlive the career of an individual athlete and if that star fails or falls from grace the impact on the collective can be disproportionate. Secondly, the image rights of an individual athlete, outside a team context, are likely to be expensive to buy-out. Thirdly, building the profile of one key star risks driving up their individual value while alienating others in the team and reducing the collective value.
For sponsors, the relationship with an individual can often be key. They need to select an athlete who is right for them and get to know what their strengths are. One athlete might be great in front of the camera, another in a corporate environment, and another may be brilliant with children. The first thing for commercial partners to do is to understand each party’s goals and strengths – with both parties harnessing those for the benefit of the athlete, sport and sponsor brands.
There is an increasing trend for elite sports to “give back” at grass roots level; this is also something that can attract sponsors. There is an ever growing demand for sports and brands to engage in participation programmes and to be seen to be “making a difference” in an authentic way.
Similarly, the value of health and healthy living messages continues to grow. For brands, access to the consumer sports market at a grass roots level – through participation programmes and community engagement – enables the development of brand continuity and multiple touch points with emerging audiences, rather more than the brand awareness piece pursued by more traditional partnerships.
Handling a Crisis
Knee-jerk reactions rarely have a positive outcome. Sports bodies sometimes need to have the courage to wait out a media storm and be clear of the facts.
The panel agreed that handling a crisis depends largely on preparation and communication. Being transparent with sponsors and making sure they understand from the outset how various difficult scenarios would be dealt with is key. It is the same with athletes and agents – they should know in advance how a particular allegation or crisis would be dealt with and robust, tested protocols should be put in place.
This was originally written for and published by Lewis Silkin, "Overview of: ‘The winning formula: sports as brands’" forum 8 September 2016.
- Brand protection British Olympic Association Commercial FIFA Image Rights Intellectual Property National Football League (NFL) Olympic Games Rio de Janeiro 2016 Social Media United Kingdom (UK)