“Commercial overhaul” stories in the sports business are often fascinating. The most interesting are ambitious, expensive, delivered with grand rhetoric, and put big reputations and accepted wisdom to the test.
Liberty Media’s takeover of Formula 1 is one example. The belief was that the previous owners had let the series stagnate, particularly by neglecting digital media. Bernie Ecclestone’s observation that teenagers don’t buy Rolexes sounded absurdly out of touch and seemed to encapsulate the sense that F1 was in need of fresh thinking. But three years, $4.6bn, and several high-profile executive changes later, and it’s hard to say that Liberty Media’s overhaul has so far been a success.
The biggest live commercial overhaul story in the Asian sports business is entering a critical phase. Football Marketing Asia, the newly named agency with the exclusive mandate to commercialise Asian Football Confederation rights from 2021 to 2028, will in the second half of 2020 begin delivering on its $2bn-plus contract.
The AFC’s competitions will be rebranded and consumer-facing marketing campaigns for them will begin. Commercial partners will start to be incorporated into those campaigns and a flurry of media and sponsorship rights deals is expected in the lead-up to the first matches of the new cycle in March 2021.
FMA is led by Patrick Murphy and David Tyler, once of Team Marketing, the agency that so successfully revamped Uefa’s club competitions in the 1990s. Their involvement has inevitably led to comparisons with that project.
When their deal was announced in 2018, industry experts pointed out clear opportunities to improve the AFC product. Tournaments were considered ripe for format changes. Their branding looked dated. The quality of broadcast production across the continent had been inconsistent. Some said digital rights could be exploited more smartly.
Underpinning this were strong fundamentals that pointed to certain long-term growth – the Asian markets have massive populations, growing economies and hundreds of millions of football fans. China was the ace card, with a government eager to build a world-beating football industry and host a Fifa World Cup in the next couple of decades.
FMA’s Chinese joint-owners DDMC were the key to unlocking the market. Their sports marketing subsidiary Super Sports Media is one of the most successful in China, and its understanding of the market was expected to yield strong results.
But it was clear that FMA, then called DDMC Fortis, had a mountain to climb. It far outbid rival agencies to secure the rights and committed to a minimum guarantee that amounted to a more-than-fourfold increase in the AFC’s rights income.
Furthermore, the two closest rival bids were led by the two executives that arguably knew the AFC rights better than anyone else – Seamus O’Brien, then at MP & Silva, and Andrew Georgiou, then at Lagardère Sports. O’Brien and Georgiou’s World Sports Group agency had sold the AFC rights for the previous 27 years.
With eight months to go until the first matches, just three deals announced, reports from the market that big asking prices are going unmet, and the global economy stunned by Covid-19, the pressure on FMA to deliver is intensifying.
Murphy recently told me that a raft of further deals are completed and waiting for announcement, that all commitments to the AFC had been fulfilled to date, and that he was confident his company could deliver an overhaul of the AFC properties that would pay off for all stakeholders, including the confederation, commercial partners, and fans.
With the possible exception of rival agencies that fancy their own chances with the AFC rights, one expects most in the Asian business will hope FMA can deliver on the great promise of the partnership.
At a time of massive uncertainty across the business, many would welcome some of the beliefs on which the deal is based – particularly Asia and China’s continued ability to deliver revenue growth – proving accurate.