Why the FA Cup and the new European Rugby Champions Cup look to be kicking off without sponsors
Two major sporting tournaments kick off in earnest in the coming weeks, the FA Cup and rugby’s new European Rugby Champions Cup, neither of which have announced headline sponsors.
On the face of it, this would appear hugely embarrassing for organisers: half a billion people tuned in to watch last year’s final of the FA Cup, the most famous club cup competition in the world; while the European Rugby Champions Cup is replacing a tournament which Heineken did its best to be associated with for 19 years.
Surely sponsors would be flocking in to be linked with two competitions watched by that much-vaunted demographic of young men and, in the case of rugby, ABC1 35-plus men?
Big ticket brands such as Heineken, Budweiser, E.ON and Littlewoods have been enticed into sponsoring the competitions in the past. So what is the difference now?
At £4m a year for shared title sponsorship of the European Rugby Champions Cup and £8m for exclusive headline sponsorship of the FA Cup, the outlay is a little expensive, but the halo of such sponsorship can help galvanise organisations internally and reap considerable PR benefit.
But speak to FA chairman Greg Dyke and Mark McCafferty, chief executive of Premiership rugby and one of the architects behind the European Rugby Champions Cup, and they will display no signs of squeaky bums.
Speak to sponsorship executives and their bums could well be squeaking, though, as the tectonic plates are shifting in the industry in favour of rights holders.
The shift is courtesy of new bumper broadcast deals which are effectively underwriting tournaments, rendering headline sponsorship deals in some cases nothing more than a welcome adjunct.
Take the FA’s recent four-year broadcast deal shared between BT and BBC valued at over £200m, a significant markup on the previous £45m a season deal with ITV which also included England matches.
Such a premium more than makes up for any sponsorship shortfall.
Likewise, a worldwide broadcasting distribution deal for the European Rugby Champions Cup, including a shared UK deal with BT and Sky, trumps the previous Heineken deal and means that McCafferty can effectively cherry-pick headline sponsors in his own time.
While there is no suggestion that such blockbusting TV deals will spell the death knell of sport sponsorship (some sponsors are still in a reverie about their London 2012 sponsorships), they undoubtedly add muscle to rights holders when negotiating sponsorship deals with brands.
Effectively, rights holders can no longer be strong-armed into a sponsorship deal which makes no sense apart from adding a few quid to the bottom line.
So where does it leave both competitions? Sponsorship experts believe there is no panic and both competitions will sign headline sponsors by early next year, in time for the business ends of the cups.
According to Andy Kenny, managing director of sports and entertainment marketing agency brandRapport, organisers of the European Rugby Champions Cup will have no trouble landing sponsors.
He regards it is a “premium rugby property”, though admits organisers would like to have at least one sponsor announced before the cup begins on October 17.
He said: “The organiser’s issue has been timing. They have had only three or four months to announce it and get the new tournament up and running. And that has been in the middle of brands’ financial year.
“So when you go to a brand and say ‘here is a new tournament and it’s going to cost you several million a year’ brands haven’t got the money sitting around in their budgets. I have no doubt they are going to get major, well-known blue-chip brands on board.”
The FA Cup, according to Rupert Pratt, co-founder of international sports marketing agency Generate, could be suffering a similar fate.
Pratt said: “A trophy tournament like the FA Cup should be able to secure major sponsorship. I would be very surprised if it doesn’t. It may be that the FA isn’t necessarily looking at title rights or it may be a case that they don’t necessarily need to do title rights.
“And when it comes to companies' financial planning, new budgets don’t necessarily kick in until January, so a lead sponsor may be being signed for 2015 to come out of a 2015 budget.”