When the German Bundesliga presented behind-closed-doors action on Saturday, May 16, it ignited a wave of interest among football fans worldwide, and a reawakening of sponsorships that had gone largely unused since the league was suspended in mid-March.
For the Maltese betting firm Interwetten the resumption in play was doubly important in that it was an opportunity to re-engage with fans of the clubs it sponsors, but also to take bets on a market that is key to its revenue.
As Dominik Beier, speaker of the board of Interwetten told SportBusiness: “The resumption of match operations was an absolutely necessary and existential step for both us and the clubs, albeit under the well-known precautions and restrictions.
“At the end of the day, it is the basis of our business. And we’d rather play in an empty stadium than not play at all.”
While much of the world’s focus was on the ‘Revierderby’ between Borussia Dortmund and Schalke, Interwetten had stakes in less well-publicised re-opening matches in the form of Hoffenheim v Hertha Berlin, and Augsburg v VfL Wolfsburg.
Interwettten is a sponsor of Hoffenheim and Wolfsburg in the ‘Premium Partner’ tier just below the main shirt sponsor and kit supplier at both clubs.
At Hoffenheim, the gambling brand’s distinctive yellow and black logo is visible on six-to-eight minutes of LED perimeter advertising coverage per home match. Hoffenheim also offers Interwetten a large static advertising space behind the LED wall and branding rights to two cam carpets per home game.
When Wolfsburg play at home, as they did against Dortmund in the week after the resumption, Interwetten gets similar rights including a ‘power pack’ of front and back LED board rights, as well as exclusive LED coverage at penalty kicks, a bespoke offering that is worth hundreds of thousands of euros in media value per season.
Beier weighs up the value of what he calls the “ghost games” in terms of these assets, as well as other IP.
“It is obvious that the range and quality of the sponsorship is lower than normal due to the loss of visitors in the stadiums,” he said. “This ranges from the elimination of activations in the VIP area, promotions on-site to advertising on the video wall in the stadium.
“Our TV relevant advertising material will, of course, retain its value. It could even be argued that they are now even more effective as stadium visitors are now more likely to watch the matches on TV.
“Nevertheless, the overall presentation of the brand clearly suffers from an empty stadium and the situation in general. The image transfer is certainly not as positive as normal.”
Interwetten’s approach in the two months preceding the return, he said, were characterised by improvisation and creativity. “In those times, our partnerships were very valuable and important for us. The loss of a large part of the betting offer not only leads to a loss of sales, but also becomes a challenge from a communication point of view.
“This makes it much more difficult to produce content and remain present. Together with our partner clubs we came up with creative and extraordinary activations to generate attention in their community and beyond.”
These ranged from interactive social media challenges to the organisation of an international Fifa game tournament with its partner clubs, which also include Sporting de Gijon in Spain’s La Liga 2 and Asteras Tripolis in the Greek Super League. “The strong digital reach of our partner clubs proved to be an excellent fit and was very important for us to be able to spend the sports-free time,” he said.
With the Premier League, LaLiga and Serie A all running timetables towards the unveiling of sport behind closed doors in the coming weeks, agencies are gearing up to support the return of sponsors activations across Europe.
According to Dan Haddad, head of commercial strategy at the Octagon agency in the UK, the return of live sport, even in a ‘fanless’ environment, is “an essential starting point for the return of meaningful sponsorship activation as it brings a return of relevance”.
Haddad continues: “This crisis has confirmed the message that ‘live’ is 99 per cent of the value. In the absence of live sport broadcasts, even assets that seem removed, i.e. not exposure-based, significantly dilute in value for brands.”
Haddad observes that brands have been highly reticent to activate their sponsorship IP in the period without live matches and may not rush back at once. “A healthy audience, driven by live content and strong media-rights partners, is essential in delivering value to sponsors to provide the relevance they need to create and execute campaigns.
“However, we would expect there still to be some form of lag until we see sponsors committing meaningful budget and resource to sponsorship activation – firstly, a period of stability will be needed so that some level of confidence will return and allay fears that the sporting calendar could be subject to further delays and cancellations which could cause activation campaigns to be pulled and spend to be wasted.
“Secondly, it would be naïve to believe that the sponsorship campaigns and messaging will be prioritised over broader brand communications over the short-term, even with the return of live sport. “
The betting sector, however, is one which may return with an increased energy, according to Haddad.
“The return of live sport will certainly provide a shot in the arm for the sponsorship sales marketplace, particularly for the headline brand exposure-driven opportunities such as shirt and sleeve sponsorships that have become increasingly commoditised. The fact that the betting sector will be able to resume meaningful operations will provide a fillip for many clubs.
“There is an interesting dynamic here, as an increasing number of clubs were speaking of their desire to move away from betting for their most prominent assets even if that meant a short-term rights fee reduction. The need for cash will no doubt quash such ambitions for many for the time being.”
The Bundesliga experience is being closely watched by other sports properties, not just in Europe but in the US, where SportBusiness understands the NBA is monitoring the situation and noting what bumps in the road, if any, the German league experiences along the way.
After its mid-March suspension, the NBA is preparing for late July resumption at one or more central venues later this year, with the Walt Disney World Resort in Orlando, Florida and the MGM Grand Las Vegas Hotel & Casino in Nevada being the most likely locations.
For some, this disruption to the home and away game model has potential to accelerate positive change in the sport.
Kevin McNulty, president and chief marketing officer of Momentum Worldwide, believes that spectator-less games on neutral grounds will offer a chance for the NBA to innovate, while providing exciting opportunities for brands.
“Fan are starved of their favourite sport, so when those sports return, you could argue the value of those fans – which is primarily why brands sponsor in the first place – is even greater.
“Brands we work with like Microsoft, Verizon and SAP are well-positioned to play an enabling role with the NBA as it redefines how the league delivers its viewing experience.
“For example, does it accelerate the application of AI in the viewing experience and with Microsoft Azure as the enabler of that fan-enhanced experience? What a great way for that sponsor to demystify its technology to the masses.
“Or Verizon leveraging their 5G technology to bring what you love from your local team into your home in new and entertaining ways? As a fan, I welcome brands bringing back the sports I love if they can add real value and enhance the experience.”
While brands are evaluating their own deals with the NBA given that “physical assets like stadium signage, business back, and on-site experiences are on hold”, McNulty argues this is not the time to exit a league deal.
“People are not turned off from the NBA, on the contrary, they are eager for its return. Better to ask what role can brands play in providing or creating additional content, or special access to players before games? Fans are eager for more and brands can be part of that. I’m very optimistic.”
NBA team sponsors
The same optimism may not apply to sponsors of the NBA teams themselves. As Sam Yardley, senior vice-president, consulting at Two Circles in the US explains: “The lines between a league and a team asset are more stacked in the league’s favour than a typical European property.
“In the NBA, more of the TV-visible inventory is controlled by the league. So the impact of moving more to a broadcast-led model, with little control over most TV inventory, is going to disadvantage a typical NBA team way more than a typical Premier League team.”
Yardley adds that the value distribution of sponsorships in the US also tend to be skewed more towards event activations than sponsorships of European properties.
“The nature of play in a sport like basketball, with multiple timeouts and stoppages, creates lots of time for sponsored activations. Without fans present that value goes away, which is a significant portion of teams’ pitches to potential partners. The ticketing and premium seating rights those clients get are also worthless in a behind-closed-doors scenario. “
On-site v digital
Outside the main US team sports, many properties are equally driven by the requirement for on-site assets that work only in relation to large gatherings of people.
“A sport like golf, which will have low levels of TV-visible inventory – most golf sponsor logo exposure is driven by players, not the tournament, relies heavily on at-event assets, things like hospitality rights and event activations,“ says Yardley. “For automotive partners the value of having new models in front of tens of thousands of wealthy golf fans is actually pretty high.
That said, the appetite for live sport that the shutdown has engendered means that sponsors may recoup some lost value through additional broadcast and digital consumption.
Steve Martin, global chief executive of M&C Saatchi Sport & Entertainment, points to the success of the TaylorMade-led Driving Relief charity skins event featuring Rory McIlroy, Dustin Johnson, Rickie Fowler and Matthew Wolff in May.
“Even though there were no fans present at the event, it was still a live broadcast and allowed TaylorMade to own much of the communication digitally and socially before, during and post the event. It was broadcast globally to millions, so having fans in attendance would only have added a few thousand to that number.”
Martin believes that when the likes of Formula 1 starts again, sponsors will switch their activation from on-site to digital assets. “Big sponsors such as Heineken will have a plan to activate in the build up to the race like they would normally. But this will be done digitally and socially and will be pointed at the home viewing audience instead. There will be no engagement at the event itself of course, apart from paid-media branding. So the more a brand is set up digitally for these moments the better.”
Whether this gets the market for new deals going is more difficult to tell. Some sectors, like airlines and travel businesses, will inevitably scale back, others may have money to spend, according to Peter Honig, senior vice-president, consulting at CSM Sport & Entertainment.
“There have been some noticeable shifts in consumer sentiment and purchase behaviour during the Covid-19 pandemic,” says Honig. “The shelter-in-place mandates have elevated certain industry sectors and these trends are an opportunity for rights-holders to capitalise on.
“Many CPG (consumer packaged goods) companies benefited from pantry loading as supply chain fears became a trending topic on many news outlets in the early days of the crisis. As social distancing and self-isolation became the norm, the demand for digital entertainment, food delivery service and at-home fitness apps increased dramatically.
“Work from home requirements gave rise to a new arms race for online meeting supremacy, featuring the usual suspects in Verizon (BlueJeans), Microsoft (Teams/Skype) and Cisco (WebEx), along with a new rival in Zoom.
“Finally, the health and security protocols that will be implemented across the industry will undoubtedly accelerate the adoption of contactless payment providers like Apple, Samsung and Google Pay, among many others.”