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Show me the money Wisden CricInfo staff - December 17, 2002
Cricket is not traditionally seen as a breeding ground for commercial radicalism but it was the first British sport to embrace fully the possibilities of sponsorship. In 1963 the United States brand Gillette paid to put its name to the game's first limited-overs competition. Tobacco, alcohol and financial-services companies followed suit. Gillette bought into English cricket to anglicise itself in order to boost its standing within the UK market. Sponsorship continues to work through the power of association, which in a global sport like cricket means different things in different countries. It is a growing phenomenon. In a cluttered media environment, the sponsorship of cultural properties offers commercial brands the opportunity to tap directly into consumer passions. Sport comes top of the hit list: in 2000, global sponsorship deals were worth just under US$25 billion (£15.8 billion) with 69% of them sport-related.
In the UK, cricket currently maintains a veneer of traditionalism, a solidity that has attracted Cornhill and NatWest. "Cricket as a sport both at the international and domestic level is associated with a certain set of values and attracts a specific audience profile," says Andrew Wilding, director of sport at UK-based firm Carat. "It can be argued that it is cricket's traditional veneer that makes it an attractive communication channel for clients."
The company developed and manages the Times newspaper's relationship with the ECB, as well as providing an endorsement programme for Boots Opticians' LASIK vision-corrective technology, which has been used by Nasser Hussain and Devon Malcolm. "What you are looking for first and foremost is a good strategic fit from a target-audience and an image perspective," Wilding says.
If cricket offers a "good fit" it has plenty of advantages over other sports in terms of the exposure it provides. UK research firm Sports Marketing Surveys has quantified what cricket has to offer. With 97 days of cricket, 813 hours of broadcasting (mostly on terrestrial television) and a cumulative audience in excess of 150 million, English cricket provides significant media exposure. The game held its own during a summer packed with sporting alternatives, most notably the football World Cup, the Commonwealth Games and Wimbledon. Who says English cricket is dying?
The national team sells the sport and this is borne out in sponsorship terms. Vodafone's relationship with Team England is worth around £12 million, according to the internet sports information source Sportcal.com; npower's deal for domestic Tests brings in approximately £11 million. The County Championship agreement with Frizzell is worth only £1 million over four years – a sign of the shift in the balance of power that has occurred between club and country.
The ECB's sponsorship income compares well with other international boards. Though England may not be able to reverse their Ashes form on the field, English cricket's sponsorship income at least competes with the ACB's. The Australians rake in around A$100 million (£35 million) from agreements with companies such as Hutchison 3G Australia (naming rights for domestic Tests), Carlton and United Breweries (sponsors of the triangular one-day series) and Travelex (international touring partners).
The revenue gained from sponsorship sits with the other major income streams for each board, most notably television rights. Domestically, this revenue is factored into the wages paid to the ECB's centrally contracted players. Divided into three bands and supported by performance-related bonuses worth over £1 million a year, the highest paid players, such as Alec Stewart and Nasser Hussain, could see their salaries reach £350,000 this year. However, this is small beer compared to the mega-deals negotiated in other sports. According to Sportcal figures, golfer Tiger Woods renewed a five-year contract with Nike worth more than US$100 million (£63 million) in September 2000, and England captain David Beckham gets £3.5 million from Adidas over 10 years, a fairly small proportion of his £12-million-a-year income.
The silly money comes from personal sponsorships and it is here that most cricketers fail to attract the big names. Craig White below has a deal with Yamaha and the top players have contracts with cricket-equipment manufacturers but in England and Australia 90% of the income drawn by the top players comes from board contracts, match fees and bonuses. The exception, as the ICC has recently discovered, is India. Cricket in India takes up around 90% of the country's total sports-sponsorship market, currently estimated at US$360 million (£228 million) a year. Player endorsements make up around US$15 million (£9 million), largely generated by the top Indian players. The ratio of wages to sponsorship fees is in the region of 40:60 for players such as Sachin Tendulkar, Sourav Ganguly and Rahul Dravid.
"The popularity of cricket as a sport in India cuts across all demographics and psychographics," says Samir Kale, managing director of CMCG India, one of the country's leading communication management consultancies. "Cricket celebrities are treated as demi-gods and offer lots of brand association opportunities. Importantly, the return on investments as compared to other sports or celebrities is much higher." As Margaret Thatcher used to scream: "You can't buck the market."
Indian marketers see cricket as the only way to appeal to consumers regardless of region, caste, gender and religion. The stakes are high and global brands such as Coke and Pepsi fight advertising wars for hegemony in a one-billion-strong market with cricketers as key weapons. Players have become millionaires and the ICC has stepped incautiously into this commercial goldmine.
Since its rebranding in October 2001, the ICC has strived to prove itself to be the daddy of international cricket. The old joke about the game's masters no longer applies (Q. What's the difference between a cricket administrator and a shopping trolley? A. You can push them both around but you can get more food in a cricket administrator). The ICC is determined to maximise cricket's global commercial standing and has angered a few people in the process, most of them, as it happens, Indian.
The ICC brokered deals with a number of commercial partners for sponsorship of its blue-chip events, namely the next two World Cups and associated tournaments, including the ICC Champions Trophy at Colombo in September. It insists that players withdraw from individual sponsorships with competing brands during these competitions and a month either side. There is a certain irony in these events: 70% of the ICC's projected income is based on Indian revenue because three of the World Cup's official partners are Indian-based companies or vital subsidiaries (LG, Hero Honda and PepsiCo India). But the move hit the Indian players the hardest.
The crisis was averted at the Champions Trophy and the players pitched up. But the ICC has put together a committee to address the issues. Certain questions remain unanswered and the ICC's fear of ambush marketing – the reason behind its dictatorial stance – may need re-examining.
Ambush marketing, common in international sport, is where brands seek entry points into major events through personal sponsorships, as opposed to official partnerships with governing bodies. Patrick Elliot, a solicitor at law firm Addleshaw Booth, which acted as both official legal partner and sponsor for this year's Commonwealth Games, says a little common sense can take the heat out of the situation.
"During the opening ceremony at Manchester there was a well-publicised incident with David Beckham sporting a prominently branded Adidas outfit in what was supposed to be a `clean' venue," says Elliot. "Legally, M2002 had no contract with Beckham – he was there in his capacity as a private individual. It took the view that the resulting publicity would only benefit the event and the media debate certainly began the Games' forward momentum."
Elliot's colleague Tony Singh says a more targeted definition of the term "ambush" would help to decide where genuine commercial threats lie. "The ambusher should only be perceived as such if they are attempting to imply, or contrive, an endorsement of a specific event and if that implied endorsement is damaging the revenues of the event." The key here is association with the event, not the teams or players.
Cricket sponsorship is vital if the game is to remain a viable property in commercial terms. In the UK, the ECB and its commercial partners are trying to broaden its brand values, making it more accessible to the non-purist. Next year's 20-over competition and the Power Cricket tournament are attempts to attract a fresh demographic and new partners. If English cricket can recapture the inner city as well as holding the village green the sport's future will be more secure.
Internationally, much remains to be done by the ICC to solve the ambush-marketing problem. The South African government has passed its Merchandise Marks Amendment Act in an effort to stamp out the practice. But, as the Packer controversy in the 1970s showed, commercial arguments can lead to damaging splits. Will the ICC's heavy-handed approach continue or will the rights of players be considered? Tendulkar and Ganguly help to raise cricket's profile in the game's biggest market at no cost to the ICC or the Indian board through individual endorsement deals. Taking the long view in sponsorship often pays the greatest dividends.
Rob Parr is a former editor of Sports Marketing magazine Click here to subscribe to Wisden Cricket Monthly The January 2003 edition of Wisden Cricket Monthly is on sale at all good newsagents in the UK and Ireland, priced £3.25
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