Moderator: Samuel Agini
– sports business reporter, Financial Times
RK - Rahul Kadavakolu
– VP, global sports business & director –
global branding & marketing, Rakuten
MP - Magda Pozzo
– strategic marketing director, Udinese
Gaming companies have become one of the primary sponsorship partners for football clubs around the world, not least in the UK where a huge number of shirt sponsors and club partners herald from the gambling sector. While that has led to talk of a sponsorship ban in the UK, and similar complications in Italy and Spain, the natural link between sports and betting cannot be denied. In the burgeoning legal US sports betting space, for instance, leagues, clubs and brand ambassadors have signed deal after deal with gaming brands since PASPA was overturned.
As such, we are likely to see gaming firms continue to work with teams and organisations to maximise that link, until perhaps regulation no longer permits it. During the Financial Times’ Business of Football conference, two executives from each side of the sponsorship realm joined the newspaper to discuss how the dynamics of sponsorship have been affected by the pandemic. While gaming operators will know exactly what they want from their partnerships, this conference presented the opportunity to learn what other firms look to gain, as well as football clubs themselves. Gambling Insider distills key points from
the event relevant to our industry.
Moderator: How bad was the impact of the pandemic and how did you manage relationships with existing partners?
Magda Pozzo: The Italian and UK experiences give me a much broader view, so I have this pragmatic view together with a more emotional implication in this particular time. Of course, the loss is there – it’s a big one. In our case, considering medium and small teams, the impact is a little bit different. But I think it’s important we think about concepts. The concept is we need to be creative. This tragic pandemic has pushed us to realise we cannot survive only on matchday revenues. This leads us to sponsorships. All our sponsors and partners, when they decided to go for our projects, it wasn’t only because of our on-pitch experience. We share values with our partners but this is long-term commitment and matching values is a lot more important than on-the-pitch results.
The pandemic is tragic but one positive message coming out of it is we must move towards this new philosophy. I have to be very honest, we closed very important contracts with multinational corporations during the Covid era. Our main jersey sponsor and stadium naming rights even decided to renew their contract during the pandemic. So besides all the problems we know, they were still very sure about the message and being connected to the strong philosophy of the company. The cooperation of the company is not as important as the message involved: more and more we have to be sustainable, and focus more on our mission and commitment than the on-pitch results.
How understanding were your partners Rahul? Have you sought any rebates on your contracts?
Rahul Kadavakolu: Overall, it’s not a one-size-fits-all answer. I think Covid-19 has certainly had an impact; sponsorship is not a small piece of the pie when it comes to revenue where a team or athlete is concerned. But I think the depth of the impact depends on what the brand is, whether it’s a B2B or B2C brand, what the lifecycle of the brand is and what level of sponsorships they have. For us, being centre of the FC Barcelona jersey, once live games started again, some of the value started coming back. We’ve been extremely lucky in terms of our partnership with Barca because they were very proactive in their approach. It was more a conversation we had to bring to the table: accept that there is a situation. Sometimes, a lot of positivity and plans can be built once there’s acceptance there is a situation. In the initial phase, nobody could see the depth of the problem or how long it would last. What compounded this was the work-from-home scenario; all of us had to change the model we operated.
But I personally believe it brought a lot of creative thinking to the forefront. I don’t think conversations with us were about refunds or rebates. I think it comes down to the kind of objectives you have set for yourself. I don’t think the objectives or the partnership itself would change, but the means of achieving those objectives would obviously change given the pandemic. For example, what we did was not try and push our brand out there heavily from a promotional point of view. I think there was a need for an emotional connection and sports does a much better job of bringing that than other means and platforms. It was a huge change for fans not being able to see players live, so it gave us an opportunity to reach out to fans and also work with our brand ambassadors, like Steph Curry and Andrés Iniesta, to increase our engagement. It wasn’t about getting our brand out there, impressions and clicks, but creating a meaningful engagement from this. We found solutions about how we can still achieve the plans we set for ourselves.
How can you measure the marketing value of being featured on Barcelona’s shirt, and has that changed pre-and-post pandemic?
RK: We need to wait for the post-pandemic figures. But we do have an independent study that’s done internally. And we also rely on several studies that are out there, including studies that come from the club. The answer is yes there has been an impact, just given that the jersey value is primarily measured by the amount of time it gets in front of the camera at the end of the day. So with games not happening, that was reduced. But we found other ways of engaging our fans; for us it was not only the fans in the stadium, it is the 250 to 300 million fans around the world we wanted to engage with. Of course, the 95,000 to 100,000 fans in the stadium are extremely critical. But the challenge for us was how do we create a similar touch-feel experience in a scenario like this even when fans are not in the stadium.
How are you creating that value away from the stadium? How are future sponsorship agreements being structured?
MP: Even if it’s a different situation – Barcelona or a smaller team like ours – again, we have to think about mission. We have to think about a niche market. Before, it was very easy; the matchday was brand awareness, creating fan engagement all over the world. Now, if you go back to the sponsorship, you need to create with each of them a niche strategy to replace what is the stadium activation we are not currently able to do. This is why it’s very important to have a strong mission and philosophy. I think we are actually quite reinforced and reassured that we always had it and we have been working on it all this time. We focus on innovation and our sponsors who work with us now are not just speaking to us because of particular marketing activations during a matchday, but it’s because of what we represent and the constancy in our philosophy. It’s a good message we should all think of.
How has Rakuten evaluated and justified the emotional connection instead of the quantifiable results of social media numbers?
RK: Engagement is one of the best ways to measure emotional value. The way fans have engaged with a brand campaign or messaging campaign you’ve run is the best way to measure it. To see how people have engaged, what kind of feedback you’ve got – we have a fairly robust system that keeps track of all this. We ran two campaigns over six months and we saw that engagement was the best way to measure this emotional value.
How has Watford’s sponsorship revenue been impacted following relegation? [Watford is another club owned by the Pozzo family, alongside Udinese]
MP: Of course, it’s had an important impact. But it was also limited by the fact there is a philosophy behind the club. There was great performance over a number of years, so we consider it as a limited moment in the life of the club, and we have big expectations for the future.
We’ve seen TV companies being given rebates due to the pandemic. Has there been compensation for sponsors from clubs and leagues?
MP: Some of our most important contracts we renewed or signed during the pandemic. So I think everybody was conscious of the problem and it was a problem we all had. We all signed contracts taking into account the limits we faced. So we didn’t have any problems with that and we were able to focus and share this situation. Where the future is concerned, we’re still talking about the tremendous impact of the pandemic. I think we should all be working now towards a pragmatic protocol to go back and open stadiums. We are currently in conversation about this in Italy and we are ready to be the first stadium to do this.
RK: It depends brand to brand and scenario to scenario. For us, sports have always been part of our game as we own a soccer team, we own baseball teams and we always use sports as a channel to engage with fans. So for us we have the power and belief in the faith of sports. Rakuten in Japanese means optimism. I can’t think of a medium that represents optimism better than sport. But I think we need to open things back up in the safest possible way; that’s the most critical thing. This isn’t just one crisis that’s affected one country or club. Hopefully, we can return to a situation where fans can enjoy the sport they love the most.
How are UK audiences being targeted by Watford and what new sponsorship methods have been used during the pandemic?
MP: It goes back to what I said with Udinese. It still all has to be related to a mission and seeing the development, along with the great results of the past, which are still a reality. The impact of the pandemic is going to be difficult to see; we have to think a little bit bigger. We need to look at the long term, so it’s very difficult to answer this question. We had a tremendous increase in previous years and this year was a little stop. We still have big objectives for next year.