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Volume 6 No. 194

Marketing and Sponsorship

Coca-Cola "will enter F1 with its Burn energy drink brand" after announcing a deal with the Lotus F1 team on Thursday, according to Alan Baldwin of REUTERS. Lotus said in a statement that "the deal was a multi-year agreement with more details to be revealed next year when the partnership begins." Coca-Cola Group Dir of Worldwide Sports & Entertainment Emmanuel Seuge said, "The creativity of teams and the passion for speed and energy that fuel the sport of Formula One make a partnership with this iconic sporting property a compelling proposition for the Burn brand." Coca-Cola has been "linked with various teams in the past, as well as with the sport as a whole." Lotus Team Principal Eric Boullier said, "We are excited to partner with Burn to build a new and innovative model for sponsorships that will combine experiences, content creation and social media." The Frenchman said social media was an area in which the team had been "at the cutting edge in Formula One for the past 18 months, recording the highest growth rate amongst fans this year" (REUTERS, 11/22). AUTO BILD reported the Lotus F1 cars "will not appear in the usual Coca-Cola red," as the company decided to enter F1 with its Burn brand. The logo of the energy drink "will be featured on the Lotus cars next year." It is "fair to assume that black will continue to be the main color of Lotus F1 cars in '13" (AUTO BILD, 11/22).

Arsenal FC "added commercial firepower" to Manager Arsene Wenger’s team-building options by signing £150M ($241M) worth of shirt sponsorship and stadium naming rights deals with Emirates, according to Roger Blitz of the FINANCIAL TIMES. The five-year deals are "extensions of existing contracts" with Emirates for the Premier League club. With a new kit supplier deal expected to be announced shortly and the Premier League’s new TV deals beginning in '14, Arsenal is "on course" to exceed £300M ($481M) in annual commercial revenues in two years. Arsenal CEO Ivan Gazidis said the original Emirates deals had helped the club’s stadium development, and the new deals were "just as critical to keep us at the top of the game in England and Europe." No breakdown of the new deals was given, although Arsenal said that they were worth £30M ($48M) a year (FINANCIAL TIMES, 11/23). As part of the deal, Arsneal's home will continue to be known as Emirates Stadium until '28. The Emirates brand will also continue appearing on the front of Arsenal's kit. The new agreement contains a number of marketing rights, which come into effect immediately (Arsenal).

FAST CASH: In London, James Olley wrote Arsenal requested that the deal’s payment structure be frontloaded to ensure it has "funds to invest in the team as soon as possible." The club’s cash reserves stand at £70M ($112M) with £30M ($48M) "retained as a contingency fund" should they fail to qualify for the Champions League. Emirates is expected to pay in excess of £30M early next year in a move that "will come too early for the January window but leave the club in a powerful position at the end of the season." Gazidis: "We want to be able to invest in the team a little bit more now so we’ll have that capability by the summer. We can pay bigger salaries, and I think we can invest more in transfer fees now. How we make those decisions will be based on a manager whose judgement over the years has been shown to be absolutely outstanding" (INDEPENDENT, 11/23). Also in London, James Riach reported Gazidis also said that the cash injection "will leave the club less reliant on revenue from the stadium, which has resulted in high ticket prices." Gazidis: "There's a lot of people that work passionately at this club who care about this club just as much as the fans do. Fans don't have a monopoly on caring about the club. Arsenal's kit deal with Nike will expire in 2014, and reports suggest the club will sign a new agreement with the German brand adidas" (GUARDIAN, 11/23). In London, Laurie Whitwell wrote supporters hoping the cost of tickets would be reduced by the extra income "may be disappointed." Gazidis: "I didn’t say they would come down. I think we’ve been very responsible on ticket pricing. Since we’ve moved to the new stadium we’ve had two increases in ticket season prices" (DAILY MAIL, 11/23).

A VIABLE PARTNER: Emirates CEO & Chair Sheikh Ahmed bin Saeed Al Maktoum said, "Arsenal’s strong appeal around the globe and ambitious approach to the game parallel our own approach to business, making them a valuable partner for our brand. We continue to see immeasurable value in our global sports sponsorships and our sponsorship with Arsenal is no different. The club has been an important enabler of the growth of our business over the last decade and we are confident this will continue as part of our extended deal" (GULF BUSINESS, 11/25).

MAKING CHANGES: BLOOMBERG's Tariq Panja reported Arsenal's latest figures showed it gets about £53M ($85M) from sponsorships, less than half of that brought in by ManU, and lower than Liverpool and Chelsea. Arsenal has trailed in commercial income because it "signed long-term agreements to help fund the construction of Emirates stadium," where it moved from the old Highbury ground in '06 (BLOOMBERG, 11/23).

Emirates airlines "wants evidence FIFA is eradicating corruption and the scandal-hit organization's public image is improving before renewing its sponsorship," according to Rob Harris of the AP. The Dubai-based carrier's $195M, eight-year sponsorship of world football's governing body expires in '14. Emirates Senior VP Boutros Boutros said Friday that the airline "has yet to see enough progress since FIFA President Sepp Blatter instigated a reform drive to prevent a repeat of scandals that have damaged the credibility of the organization in recent years." Boutros said, "So far they talk a lot about them, but we are yet to see. They look serious about it, and we are optimistic. We hope they will work on it and do what the public want ... we are waiting until after 2014 to evaluate." Asked if Emirates "will ensure FIFA is no longer perceived to be a tainted organization before agreeing on a new deal," Boutros responded: "Definitely" (AP, 11/23).

F1 team Red Bull Racing has agreed to a four-year extension of its partnership with Japanese car brand Infiniti, which first began in March '11. The increased agreement will see Infiniti become title partner from '13, meaning the Red Bull Racing's team name will become Infiniti Red Bull Racing from the start of next season (F1). SPEED's Adam Cooper reported the extended deal, which runs through '16, "also includes technical cooperation in areas such as energy recovery." Red Bull Chief Technical Officer Adrian Newey said, "Having a committed technical partner like Infiniti gives us a great platform for working together on technical projects, such as the Energy Recovery Systems for the 2014 season" (SPEED, 11/25). The SID reported the extension "will bring in an additional €15M ($19.5M) a year." Red Bull Motorsports consultant Helmut Marko said, "The budget will increase." Red Bull Racing "is already regarded as the team with the highest budget" (SID, 11/25). 

TELL ME WHY? AUTOWEEK's Mike Pryson caught up with Switzerland-based Infiniti F1 Activities Global Dir Andreas Sigl, and Nashville-based Infiniti Marketing Dir for the Americas Keith St. Clair, to talk to them about Inifiniti's place in F1.

Why Formula One?
Andreas Sigl: F1 has the same global footprint that we are looking at. It's as big as the Olympics as far as its reach, and it's every other week. If you look at what Red Bull does, they do promotions all over the world. F1 sounded good. And you want to be at the front of the grid.

How does the relationship go beyond just writing a check?
Sigl: We have really opened our toolbox to the team and said, whatever you need, help yourself. They are an independent team. They don't have the Ferrari, the Mercedes, the McLaren resources. We've been able to contribute in many ways already -- new battery technology, KERS technology, a scratch shield paint.

When you talked about going into Formula One, was it good fortune that you latched on with a championship team like Red Bull or was Red Bull your target all along?
Sigl: I think a little bit of both. We were convinced that we needed to be working with a top player. If for X amount of dollars, you can get this much [sticker] space on the 24th car in the field versus a top-three, then I think it's good to break in with a top team.

Going forward, it sounds like Infiniti and Red Bull have a relationship that is prepared to go beyond its current contract, which is through 2013?
Keith St. Clair: Absolutely. We're not just there to say, "We've got our name on the car." Our organization, our active members with Red Bull, to bring this sport to market. The level of involvement continues to escalate. We have engineering resources in England with the team. They've have engineering resources of there's in Japan. The intellectual capital sharing continues to escalate. It's a partnership.

It's clearly much, much more than just slapping a sticker on a car.
St. Clair: It has to be that way. It may have started out that way in the first three or four months of the relationship. Frankly, the deal originally was done to help our brand in Western Europe. ... What Formula One did was give our car brand a vehicle to gain immediate awareness and some sense of association of what we are and what we stand for. It made perfect sense. It worked out immensely well the first season, but you can't stay there. You have to continue to get truly involved with the products, the technology, the racing events, and that's exactly what we've done.

Spanish bank Santander wants to become the "bank of football" in the Americas, according to Guilherme Costa of MAQUINA DO ESPORTE. The project "is curious" as it coincides with "two theoretically contradicting trends." Recently, Santander "reduced its contract" with the Copa Libertadores, while rivals have intensified their football investments in the region. The company had been the title sponsor of the Libertadores since '07, but it decided "to diminish its participation in the event." Starting next year it will only become the official bank of the tournament. Santander Global Advertising & Sponsorship Dir Enrique Arribas said, "The bank is leaving the Libertadores to become the bank of football in the Americas. We do not want to focus on just one event. We want to become the bank of football." Apart from the Libertadores, Santander believes that it will have "more possibilities to invest in football operations." The bank has identified the U.S. and Mexico as possible places to invest. Currently, direct competitors of Santander have "increased their investments in football." Itaú has a contract with the Brazil national team and the 2014 World Cup. Caixa Econômica Federal last week signed a deal to become the title sponsor of Brasileiro club Corinthians in a R$31M ($14.9M) a year agreement (MAQUINA DO ESPORTE, 11/23).

Chinese beer Tsingtao has become an official partner to the Chinese Basketball Association in a deal brokered by Infront Sports & Media. The agreement will see Tsingtao involved at all 272 of the league's regular season games, which kicked off on Saturday, as well as the 37 playoff games, the final on March 22 and the CBA All-Star Weekend on Feb. 23-24 at the Guangzhou Int'l Sports Arena. So far, the league on average attracts a TV audience of more than 100 million, but this season, TV exposure is set to increase further. CCTV-5 will broadcast seven games each week, with four live and three delayed, resulting in an unprecedented amount of exposure on China's top sports channel. Negotiations are still underway with several regional networks as well for additional live coverage throughout the year. Tsingtao will also set up a 3-on-3 basketball series across China for amateur players and basketball fans. The brand will be integrated into all promotional materials, as well as on the official CBA website. Additionally, the Tsingtao Brewery will serve as the title sponsor for the cheerleading squad (Infront).

The German Basketball Federation (DBB) agreed to a partnership with Chinese sportswear company Peak to become the federation's official sportswear provider. Starting Jan. 1, Peak will supply all German national basketball teams with its apparel and equipment. The partnership will run through Dec. 31, 2020 (DBB). ... Australian bank ANZ has extended its sponsorship of the Shanghai Rolex Masters as its int'l banking and finance partner for the next five years. The current agreement, which qualifies as a "diamond sponsorship," is already in its fifth year (ANZ). ... The German Handball Federation (DHB) signed a sponsorship deal with Belgian watchmaker Ice-Watch to become a premium partner. The Ice-Watch branding was seen on Germany's shirts when it took on Romania on Saturday and will be seen during the European Handball Championship, which will take place between Dec. 4-16 in Serbia. The deal was brokered by SPORTFIVE and includes branding on the hall floor, promotions and print ads and a contingent of VIP tickets. The agreement was concluded for an initial one year with an option to extend it (DHB).

Championship side Blackburn Rovers agreed to a two-year sponsorship deal for the Riverside Stand at Ewood Park with Regulatory Finance Solutions. A management consultancy business, which provides regulatory expertise for the financial services industry, RFS work closely with the U.K.'s major banks, life and insurance companies (Blackburn). ... Championship side Wolverhampton Wanderers FC has triumphed at the Fooball Business Awards by winning the award for best marketing campaign. The "My Wolves" initiative, a new seasonal membership scheme operated by a new rewards module, was specifically developed for the club by Iris Ticketing to integrate with its ticketing system (Football Business Awards).