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Packing a punch – 2. Sponsors and city rivalry

Sponsors

With sport still so widely available and accessible, it is no surprise that sponsors are still attracted to the sector in a big way. The last major report on the business in 2013 by IMR Sports Marketing put the value of the sector at around Aus$735m, with Australian rules, rugby union and rugby league cited as the big three sports.

Since then the deals have continued to flow, with car company Holden signing a record Aus$3m-per-year deal with AFL club Collingwood in August 2015. At league level, the major partner is automotive manufacturer Toyota, which has been title sponsor since 2004. The company’s agreement, which expires at the end of the 2016 campaign, is worth about Aus$8m per year.

Elsewhere, high-profile sponsorships include the support of Optus and Qantas for Cricket Australia, Telstra’s partnership with the NRL and Kia’s sponsorship of the Australian Open tennis grand slam in Melbourne. Emirates has also been the title sponsor of golf’s Australian Open since 2014, having first linked up with the event as an official airline in 2009.

Interestingly, Western Australia’s state government recently took the decision not to sell naming rights to its new 60,000-seat Perth Stadium, which is due to open in time for the 2018 AFL season at a cost of Aus$1.5bn.

There has been a big migration of motorsports to pay-TV platforms

In terms of other key sports, golf has experienced a renaissance since its major domestic events started being shown on Seven. Having picked up the Australian Open in 2012, the network now shows the country’s top four golf tournaments – a strategy that has delivered strong ratings.

In 2017, Champions League Basketball, featuring eight teams, is expected to launch, with a 10-week season running from May to August. The competition will sit alongside an existing professional league called the NBL, which will run from October until April.

These are also interesting times in Australian motorsport. Notwithstanding the protection provided to free-to-air television by anti- siphoning, there has been a big migration of motorsports to pay-television platforms.

Firstly, rights for the popular V8 Supercars series were sold to Foxtel, Fox Sports and Ten in a Aus$241m, five-year deal. Then the same combination of broadcasters acquired rights for the Formula One world championship from the start of 2015 – again in a five-year deal.

City rivalry

Melbourne has been the destination for the Australian F1 grand prix since 1996, with a contract to stage the race through to 2023 having been agreed in September 2015.

Sydney, the popular host of the 2000 summer Olympics, has long coveted the Australian Open, the first tennis grand slam tournament of the year. However, Melbourne, which has staged the event at Melbourne Park since 1988, retains the trump card.

A commitment from the state of Victoria to spend almost Aus$1bn on upgrading facilities was enough to secure a long-term hosting deal in January of this year through to 2037.

Renovations include additional seating, a retractable roof for the Margaret Court Arena and improved links to the city’s transport network.

Victoria’s investment is based on the perceived value of the event to the city and state. A report from Deloitte Access Economics estimated that the 2014 edition of the event was worth Aus$245m to the state – with 2015 believed to have topped that figure thanks to its record 703,000 attendance.

Victoria’s Minister for Sport, Tourism and Major Events, John Eren, said: “The Australian Open draws visitors from all over the world. It means our businesses are busy and our economy strong, and that means more and more jobs. We’re investing to ensure Victoria remains the home of the Australian Open and on the travel list of sports fans across the globe.”

However, Sydney retains long-term hopes of luring away the high-profile event, with Tennis New South Wales reportedly lobbying for 10 outdoor courts to be built next to a proposed Aus$150m indoor stadium near the Sydney central business district.

As one of the sport’s four prestigious Grand Slams, the event is also incredibly important to Tennis Australia, with 13 million Australians believed to have watched the event on television last year.

Internationally, a record 370 million people watched last year’s event in 200 countries. This was welcome news for Tennis Australia, which took over TV production of the event from its long-standing media partner, Seven West.

An increase in the number of matches covered – from 250 in 2014 to 411 in 2015 – led to big uplifts in Japan, where 54 million followed the progress of Kei Nishikori, and in China, where 13 million streams were generated via leading Chinese online platform iQiyi.

Although Seven no longer produces coverage of the event, it is still the Australian Open’s main broadcast partner in a relationship dating back to 1973. The current contract between the two parties was agreed in 2013 and is worth about Aus$40m, combining free-to-air, pay-television and digital rights.

Outside Australia, the event’s partners include Eurosport, which airs the tournament across Europe. Echoing the Seven partnership, the relationship stretches back two decades and was recently renewed through to 2021. As well as the Australian Open, the agreement also includes live action from the annual Hopman Cup, men’s matches at the Brisbane International and Apia International Sydney tournaments, and the World Tennis Challenge in Adelaide. All told, Eurosport will provide around 300 hours of live television coverage from these events alongside live online coverage of certain matches.

Europe is important, but Asia is Tennis Australia’s overseas priority. South Korea’s Kia Motors is the main sponsor at a cost of Aus$10m per year, while other Asian sponsors include Fuji Xerox and Toshiba from Japan and Maxxis from Taiwan. Chinese ball boys and girls are used at the tournament, and a Victoria- backed tourism campaign was recently activated in Shanghai, China.

 

To continue reading the Australia Focus, please click the links below:

1. Active players and buoyant market

3. Challenges and women’s sports

 

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