In the week that the largest single sporting event this planet has ever seen opens in France – backed by massive resources – it seems ironic that one of the world’s oldest sports tournaments is preparing for a meeting with the UK Government to fill a funding shortfall of as much as 40m.
The organiser of the Manchester Commonwealth Games in 2002, in conjunction with the Sports Council, will meet Chris Smith’s Department of Culture Media & Sport next month. The two sides met in May to establish Smith’s willingness to cough up the extra cash – which the organisers say is needed to build a permanent, rather than temporary, stadium.
The Government has asked for more information, but indicated that there will be no extra money.
“The organiser has been asked to come back with revised and additional information on costs,” says a culture department spokesman.
“The Government is keen to promote large events, but a sympathetic ear is all that we can lend at the moment.”
Manchester 2002 chief executive James Seligman emphasises that the extra money is for infrastructure not operating costs. If the Government does not stump up the money the organiser’s plans will be scaled back and a temporary stadium, estimated cost 10.5m, will be built instead.
But Manchester 2002 has also set itself steep sponsorship and TV rights targets to cover operating costs of 58.5m for the ten-day event. Sponsorship, the bulk of it coming from the UK, is budgeted to contribute 27.5m, while the worldwide sale of TV rights is expected to raise a further 25m. Among the costs is a budget of 5m for marketing and a further 4.5m for public affairs.
The UK sponsorship deals and worldwide TV rights are being sold by Mark McCormack’s IMG – which is also responsible for selling Millennium Dome packages. But, although it has been doing its “homework”, no negotiations will take place until after the end of this September’s Games in Malaysia.
The culture department refuses to discuss whether it would meet any shortfall in the operating costs. “If put to us we would have to decide accordingly. We can’t pre-judge that,” says the spokesman.
More significant is the fact that the impact of the Games has been diluted by the vast number of alternative and more lucrative competitions and the ensuing pressure on athletes to compete.
For the first time cricket and rugby sevens will be trialled in Malaysia in an attempt to broaden the interest of the event. But England, arguably among the strongest countries in both sports, is not sending teams because of scheduling pressures.
Not only are there more sporting events – from the World and European athletics championships to cricket and rugby world cups – competing for sponsorship and TV money, there is also the question of the continuing relevance of the Commonwealth.
The competition began life as the British Empire Games in 1930. But larger members, such as the UK and Australia, are now more closely tied with trading blocks in Europe and Asia. For many people these ties are more important than any affinity with other Commonwealth countries.
Competition for sponsorship in 2002 will come from the football World Cup in Japan and Korea, plus the Winter Olympics in Salt Lake City. More worrying for the organisers of 2002 is the fact that none of the sponsorship research agencies contacted by Marketing Week, including RSL and SRI, have conducted research into the attitudes of potential sponsors to the Games, because there is no demand for the information. However, the recently launched agency Octagon is investigating such a research project.
The Malaysia Games have been overshadowed by environmental concerns, the collapse of Asian economies and, only last week, opposition political parties suggesting that the country was being converted into a “police state”. At the same time the organiser, Sukom 1998, has sold only 60,000 tickets out of a total 1.2 million and according to press reports in Asia faces a shortfall of more than 5m on operating costs.
The Malaysian Government has underwritten much of the infrastructure costs of the Games and according to some sources will also pick up any shortfall in operating costs because of its political commitment to the event. According to the agency Alan Pascoe International (API), which is selling the TV rights for the Kuala Lumpur Games, $50m (32m) has been raised.
But nobody from the organising committee in Kuala Lumpur, including chief executive Tan Sri Hashim Mohd Ali and director of operations Nashatar Singh, was available to confirm this figure, or to reveal how much has been raised in sponsorship.
Unlike the Olympics or World Cup, the Commonwealth Games sponsorships are not sold on a group basis, or more than one Games at a time.
All the deals for the Malaysian Games, which begin in September, have been sold on a local basis even though international brands Canon, Kodak, Carlsberg, Pepsi, MasterCard and Nestlé are among the sponsors. None of the 1998 sponsors were sponsors in Canada in 1994 and none of the 1998 group have signed up for Manchester 2002.
“The sponsorship of the Malaysia Games is local,” says a spokeswoman for Carlsberg-Tetley. “The Commonwealth Games is a precursor to the Olympics, and neither of these has an official beer sponsorship category. Given that, it is unlikely we will do a local sponsorship in 2002, since our focus is football. It is four years away, so we remain open.”
Last year the Commonwealth Games Federation hired API, which has sold the TV rights to the past three Games including Kuala Lumpur, but not Manchester, to develop rolling international sponsorships from one Games to the next. Its brief begins with the 2006 Games – which will presumably reduce the responsibility of the organising committees of future competitions.
“There is a hierarchy of events,” admits Alan Pascoe, who is leaving API to set up a new agency Fast Track to develop the marketing of British athletics. “But that is obvious. Sponsorship will take further work – there are multinational companies doing local deals rather than striking deals at their headquarters.”
This is a significant development, but not one that is expected to have any real positive impact on Manchester 2002.
“The Commonwealth Games has not been effectively branded and marketed in the past,” says Manchester 2002’s Seligman, who was previously chief executive officer at Speedo and Timberland Europe. “There has been no strong marketing presence – especially at the organising committee level.
“The Games is an intellectual property – we need to develop a high quality product to attract sponsorship and TV rights. We need to apply classic marketing tactics to exploit the Games.
“The (sports) calendar is fuller than in previous years, but that just means that we have to be more competitive in the market. We are looking at the Games as a marketing and branding exercise,” says Seligman.
He refuses to give details of what those tactics are, or indeed how the “property” will be exploited. One pointer is the appointment of ad agency TBWA GGT Simons Palmer to “develop a total communications programme” – effectively to promote and market the event (MW June 4). The agency will advise the organisers on sponsorship, merchandising and whether there is even a need for advertising.
Another, more immediately public pointer, will come in the summer, when the Manchester 2002 logo and mascot is unveiled.
It will form the basis of all licensing and merchandising contracts in the next four years – contracts expected to bring in an additional 1.5m. Seligman refuses to discuss it, other than to say it will be very different from the existing logo first used when Manchester was bidding to host the Games.
The priority is to recruit a collection of ten or 12 headline sponsors to provide a foundation for selling further tiers of sponsorship. An IT or technology company is seen as essential, largely because of its involvement in the infrastructure development. Siemens is the IT sponsor in Kuala Lumpur.
The target markets for the TBWA campaign are potential sponsors, Government and “decision makers”, athletes and the other members of the Commonwealth federation and the general public.
The programme could be seen as an attempt to raise the Games’ profile in the hope of attracting more sponsorship – that is certainly part of the brief – but, more importantly, it is part of the effort to make the Games relevant once again.
“The media mentality is that the Commonwealth Games is not a premier league event – only first division – but the athletes do not think that,” says Seligman. There is also a money angle which makes the Commonwealth Games attractive. “As a sponsor, even if you are interested in being associated with athletics or a multi-sport event, if you do not have $150m in your back pocket you can forget the Olympics.
“There are sponsors out there who want to be associated but can’t afford that money. The Commonwealth Games will give them a value for-money package delivering big audiences.”
Michael Browning, marketing manager of the Games in Brisbane in 1982, argues that the event remains relevant, but has to be careful about trying to position itself as a “mini” Olympics. “There is always a danger in marketing any event and that is to over-sell it,” warns Browning. “If you do that and under-deliver, then that can be damaging. So the positioning is crucial.
“It should be sold as a Commonwealth celebration of sport. If it is sold as what it actually is, rather than pretending it is the world’s top competition, then I see no reason why it will have difficulty in getting the sponsorship. The Games definitely still has a relevance.”
Browning, who is now event manager of the 1999 Cricket World Cup in the UK, is meeting with members of the Manchester 2002 team this week, to discuss cross-marketing opportunities.
Manchester 2002 estimates that 1 million people will visit the city during the Games, that they will create 4,000 permanent new jobs and that an extra 100m will flow into the city in the run-up to the competition.
The organiser of Manchester 2002 is seeking to add some steel to the event, historically known as the “Friendly Games”. Research shows that both consumers and potential sponsors want to see more “youthfulness, passion and excitement”.
But ultimately the main challenge for Manchester 2002 will be to make the Commonwealth Games a relevant event.