- Agency making a “fundamental shift” to brand partnerships
- 27-year relationship with Asian Football Confederation ends this year
- New owner HIG Capital ready to back rights investments
It is a time of change for the Sportfive agency in Asia. As well as adapting to the recent global-level change of ownership and branding, the regional arm this year ends the partnership with the Asian Football Confederation that has been the centrepiece of its business for 27 years. There is also the matter of weathering the biggest global health and economic crisis in 100 years.
Adrian Staiti is leading the company’s Asian business through this, as head of Apac and head of global sales. Speaking to SportBusiness this week, the ebullient American laid out the areas on which Sportfive will focus to drive Apac growth in its post-AFC era. One of the most important changes will be a reduced focus on media rights trading and a greater emphasis on sponsorship. Matching Asian brands to international sports properties is considered a key opportunity.
“I think there is a fundamental shift to the sponsorship and brand partnerships side of the business for our company,” Staiti says.
Sponsorship shift
Media-rights trading has been a big part of Sportfive’s business in Asia. It was the biggest component of the AFC job, with sponsorship sales accounting for a minority of revenues.
But media-rights margins have tumbled in recent years. Pay-television operators in the region have seen growth stall or reverse, throttling what was the biggest source of revenue for sellers. Competition between broadcasters and agencies had driven values for many international properties to no-longer sustainable levels, and many fees are now falling.
“We still have some activities happening on the media side of the business, just not to the extent we feel we can make an impact with brand partnerships,” Staiti says. “Are we still interested in media rights from the perspective of brand-led media rights or content creation, or branded partnerships? The answer is yes, of course, that’s really interesting to us. But the classical media-rights trading space is not that appealing to us anymore.”
The sponsorship assets the agency will be pitching to Asian brands include English Premier League pitchside LED advertising boards – it controls about 50 per cent of the league’s total inventory – and commercial rights for German Bundesliga club Borussia Dortmund, the Royal Belgian Football Association and the Commonwealth Games.
“We have a lot of international, European assets that are of incredible value in the Asia-Pacific market,” Staiti says.
It will also seek to play match-maker for Asian brands looking for sponsorship opportunities more generally.
“We feel that there is a very strong desire for cross-border deals, and specifically a lot of Asian brands that are looking for investments outside of Asia. We can provide that cultural bridge, that knowledge base to help these Asian brands find opportunities in the Western part of the world, and to do it the right way – do the proper analysis for them, and ultimately bring those deals to closure.”
Staiti expects Covid-19 to be only a temporary disruption to the demand from Asian brands for international marketing platforms.
“There will probably be a short period of time where there’s a domestic focus for brands,” he says. “For a lot of brands, there will probably be a focus on cause-based sponsorships and partnerships that are forged to support their various communities…I truly believe in that, I think that’s a great thing to do and quite needed at this juncture. But over time you’re going to see a return to the internationalisation of the sponsorship business, and more and more Asian brands will continue to invest in big international rights as global economies begin to open up.”
Growth themes
Though he expects the Covid-19 interruption to be relatively short, Staiti says it is presenting agencies with attractive opportunities. Backed by new owners HIG Capital, the American private equity firm, Sportfive is, he says, in a good position to capitalise on them.
“There are a lot of events, rights-owners, teams, clubs, that are strapped for liquidity right now. It’s been a tough first two quarters of the year. As an agency, this is an extremely interesting time to be a supportive measure for those rights-owners, to come in and provide support through various means while also guiding them with much needed commercial rights revenue growth for their IP.
“We have three to four calls a week globally discussing which properties are of interest to us and which IPs are approaching us for collaboration opportunities. We’re looking at both global opportunities and region-by-region opportunities.”
Alongside these and the Asian sponsorship opportunity, other themes that Sportfive considers ripe for growth in Apac include: China, Vietnam, football in Southeast Asia and esports.
The agency’s Singapore office has been pared back as the AFC project has wound down. But it has beefed up its China office over the last three years to 30 staff.
“We realised that in order to have success in China, we need to be on the ground with local mainland Chinese native speakers, that can build solid relationships with brands and rights owners in the territory,” Staiti says.
Asean Football Federation Suzuki Cup commercial rights are Sportfive’s prime asset in Southeast Asia, and Staiti says the agency is exploring further opportunities with the AFF.
“We believe that within Southeast Asia, football is a great asset to focus on and we are currently engaged with the Asean Football Federation to figure out ways to double-down on what we’re doing for the AFF Suzuki Cup, with maybe some of their other assets and tournaments in the region. We’re also talking to FAs in the region about opportunities to create events and content at a domestic level.”
Esports is unsurprisingly identified. The aspect of that world that particularly interests Staiti is branded content creation – and he says traditional sport should be taking notes.
“Esports is doing such a phenomenal job of creating content for brands. There’s probably a number of reasons around that – the talent is more accessible, they’re more willing to do things…
“I think what you’re seeing in esports-brands space, in terms of how brands are engaging with the audiences, is a trend that we will need to see happen across all of sports…I think we as an agency need to challenge rights-owners to say you need to be more creative in the way that you approach the space.”
New ownership
The sports industry will watch with interest the effect of Sportfive’s new owners on the business. HIG Capital took a 75.1-per-cent stake earlier this year. Former owner Lagardère, the French conglomerate, retains 24.9 per cent. Lagardère pieced Sportfive together by acquisition, starting with the original Sportfive agency in 2006 and adding the Sweden-based IEC in Sports and Singapore-based World Sport Group agencies in 2007 and 2008 respectively. Lagardère struggled to turn the three firms into a single, coherent business, and eventually sold up to refocus on its publishing and travel retail businesses.
Staiti points out that Sportfive is still being run by essentially the same management team. But HIG will, he says, help Sportfive move quickly to take advantage of new opportunities.
“It’s not a revolution for our business, but rather an evolution. A lot of the same individuals are still here, running the business…I’m confident that the C-suite of Sportfive has the ear of HIG and that we’re going to rapidly move this business forward. You’ll see a lot of things happen quickly rather than over time.”
His impression so far of HIG has been “an incredibly smart group of individuals who have picked up on the dynamics and nuances of the sports industry and how it operates. They know how to hire good people and they will let those people do their jobs – ultimately providing support to us where needed. So far, that’s exactly what they’ve been doing.”
Comeback vision
The Sportfive sales chief is naturally positive about the future for the agency and the wider sports industry, even amid the current Covid-19 gloom. He expects normal service to resume and dismisses talk of fundamental change.
“I’ve been very adamant in saying I don’t believe that Covid will change the industry dramatically…I do agree that, in the short term, we are facing challenges. Unless you’re a tech-based delivery company, or Alibaba, or Amazon, you’re facing challenges. But I don’t believe this is a major reset for our industry.
“I think this is an opportunity for our industry to grow and evolve, to learn to be more digitally savvy. That was a trend anyway, but it’s been fast forwarded. But I strongly believe that sport will come back in its full capacity stronger than ever.”
There is, he says, no substitution for the live sports experience, including anywhere in the digital realm, so a return to full stadiums is inevitable.
“If I can envision this: the opening ceremony next summer at the Tokyo Summer Olympic Games could be one of the great celebrations of the world coming together after a difficult period that we will experience in our lifetimes. That moment, in that stadium, and that opening ceremony, could be epic.”
It’s a vision most of the sports industry will cross its fingers for.
