Making or breaking the Commonwealth Games

It will be the biggest sporting event the UK has ever staged. But the sports headlines last Wednesday morning were all about ex-sports minister Tony Banks not liking current sports minister Kate Hoey, who in turn has made it clear that she doesn’t like either the plans for Wembley stadium or, for that matter, Tony Banks. But, frankly, who cares?

Perhaps it is the insular nature of the media, but by far the most significant sports business story last week was the deal struck by United Utilities to sponsor the 2002 Manchester Commonwealth Games. The story barely made a digest in most national newspapers, which highlights the greatest problem facing the organisers in their search for sponsors – the games don’t have a national identity and most people either don’t know, or care, about them.

It is still seen as an event in the North-west that will take place some time in the future. That has to change – and United Utilities, better known as Norweb and North West Water, could be the starting point.

It is not the biggest deal ever struck – its mix of cash, kind and pre-paid tickets total £31m – but its significance lies in its symbolic value to the games. It is the first positive sign in over a year that the games are commercially back on track.

For most of last year, the games were in danger of spinning out of control. There were behind-the-scene arguments, while the search for a chief executive proved fruitless. There were serious doubts over whether the event would happen – or at least, whether it would be the all-singing, all-dancing extravaganza planned.

Sponsorship deals which were only “weeks away” from being announced never materialised, and the whole thing was left in limbo while the Government decided how it would respond to a report from the all-party Select Committee on Media, Culture and Sport.

The committee, chaired by Manchester MP Gerald Kaufman, called on the Government to take an urgent look at the games’ financial plans and “strategic management” and proposed that a cabinet minister be appointed as a middleman between Downing Street and Manchester. The city council wanted someone who could do for the games what Messrs Mandelson and Blair had done for the Dome – go out and raise some sponsorship cash – but also be a government-level cheerleader.

Few would describe Ian McCartney as a cheerleader. The adjective “bruiser” is more usually applied to the MP for Makerfield, near Wigan. But he is a growing influence within Blair’s inner circle.

One sponsorship source says: “The organisers have a mountain to climb but it looks like the Government is getting behind it, which will make a huge difference. You cannot underestimate the amount of work that has been done behind the scenes to impress upon the Government that it cannot afford to let the 2002 games fail. But there will be another election before the games and you can’t always depend on politicians.”

The hand of New Labour can already be seen at work. McCartney took up his role as games “troubleshooter” in August, compiled a report, and delivered it to Blair. The Prime Minister then met the games organisers in December, which was tantamount to giving them a seal of approval. Remember, this is a government that is neurotically afraid of being seen to fail.

Frances Done, formerly chief executive and treasurer at Rochdale council, was duly appointed chief executive of the games earlier this month. More management changes are expected. Done may not have the marketing background of her predecessor, Jim Seligman, but as a former Labour councillor in Manchester, she will know her way around the minefield of the city’s politics.

Meanwhile, commercial director Niels de Vos has managed to get the games onto the sponsorship agenda – agencies are now at least aware of it, which they were not last summer. Yet it remains a low priority. The games have to be positioned more as a national than as a Manchester event – a politically sensitive matter for those Manchester organisations which originally funded the city’s bid for the games. But it will have to be done.

The next priority is to sign sponsorship deals with an airline and an IT company before the summer. Talks are continuing with fast-food, clothing and car manufacturers.

The gap of a year between signing sponsor number one, Manchester City Airport, and number two has seemed like an eternity for the games organisers. At that rate of success, it would be 2009 before the event raised enough to meet its estimated £345m sponsorship target.

But the United Utilities coup is the start of better times for the Commonwealth Games. It looks like a deal straight out of the New Labour sponsorship handbook. The utilities giant, which has been criticised for paying directors high wages, benefits locally from its association with the games and nationally from supporting a project that now has the Labour seal of approval. Even if the deal proves to be a false dawn, at least the organisers have secured the electricity and water supply when the games get underway in July 2002.

This is the first of a new monthly series of columns about the business of sport. Tom O’Sullivan was formerly deputy editor of Marketing Week.