sailing sponsorship
Sail of the century
While the crowds cheered Britain's record-breaking sailor in Falmouth yesterday,
her sponsors were indulging in a quiet moment of celebration.
Cahal Milmo reports on a very substantial DIY deal
09 February 2005
Seven years ago, in the spring of 1998, an unknown 22-year-old sailor
from landlocked Derbyshire approached one of Britain's largest retail
groups for £50,000 to fund her entry in an obscure ocean race that
was little-known outside France. Few would have given Ellen MacArthur
and her business partner, Mark Turner, much chance of success as they
sat down with the money-men of Kingfisher Plc, owner of the DIY chain
B&Q, to make their case for sponsorship in the Route du Rhum.
What was in it for a company whose portfolio at the time ranged from Superdrug
to Woolworths? Why should they put money into a sport Edward Heath memorably
likened to "standing under a shower tearing up £5 notes"?
The answer arrived shortly after 11am in Falmouth Harbour yesterday when
Dame Ellen stepped off her trimaran, catchily named B&Q/Castorama,
in a blizzard of ticker tape bearing the corporate colours of her two
key sponsors.
In so doing, she earned Kingfisher's two flagship brands, B&Q and
the French DIY chain Castorama, an estimated £2m in free advertising
from one single morning of saturation television coverage in Britain alone.
Media buyers yesterday reckoned B&Q and its stablemate have enjoyed
global publicity in print and airtime worth £75m in the past four
days alone. The final total for Dame Ellen's 71-day voyage is likely to
exceed £100m, a figure which excludes the benefit to B&Q of
what experts refer to as the "cool human" factor of being inextricably
linked with a sporting hero.
It is not a bad return for an investment by two DIY chains more associated
with creosote than crossing oceans. They paid out little more than £3m;
that is £1.2m for the cost of building the B&Q/Castorama trimaran,
plus £2m in support costs.
Unsurprisingly, Kingfisher and its two DIY subsidiaries were yesterday
reluctant to be seen publicly rubbing their hands with glee at their publicity
coup, preferring instead to play the role of proud patrons. As a spokeswoman
for B&Q put it: "Of course there is a benefit for us in terms
of fantastic coverage. But that is only possible because of Ellen and
what she has achieved. We are a partnership."
But just as the company ensured maximum exposure for its brands by putting
the names and logos of B&Q and Castorama on alternate sides of the
75ft trimaran, so there are two sides to this tale of corporate magnanimity.
Future sailing histories will insist it was the determination and enthusiasm
of Dame Ellen which persuaded Kingfisher's executives to provide the money
that started her yachting career at that meeting in 1998. The conglomerate,
at the time itself largely unknown as a household name despite owning
brands such as Comet and B&Q, agreed to pay the £50,000 to build
Kingfisher I, the boat in which Ellen MacArthur eventually secured fifth
place in the Route du Rhum.
This achievement secured her the admiration and adulation of millions;
not in her native Britain, but in France. And it was this public profile,
along with the personal passion of Kingfisher's then chairman, Sir Geoff
Mulcahy, for sailing, which drove the corporation's interest in the young
sailor, who months earlier had been so strapped for cash she was forced
to live on board her battered boat in a Breton shipyard.
One City source familiar with the deal said: "There was a lot of
thinking at the time in Kingfisher that it needed to expand beyond the
UK and one of their prime targets then was Castorama. They were aware
they were almost unheard of in France and they needed to raise their profile
if it reached the point of seeking backers in the Paris markets. The French
are sailing-mad and when Ellen showed up they saw what was effectively
a bargain opportunity. It was not all about generosity to aspiring youngsters,
by any means."
Bargain it certainly was. Within the first three years of the sponsorship
deal, Ellen MacArthur had secured her ground-breaking second place in
the Vendée Globe round-world challenge and gleaned £80m in
free publicity for Kingfisher, which completed its takeover of Castorama
in 2002.
The company recently released its own figures which show that between
1998 and 2001, it had nearly 10,000 mentions in 8,000 newspaper articles
across 23 countries as a result of its association with her. The cost
of buying newspaper space to reach the same audience, some 4.85 billion
people, would have been £15.4m.
B&Q - slogan, "You can do it" - estimates its gain in free
publicity from its sponsorship of the sailor at £95m. David Roth,
B&Q's marketing director and the man in charge of the £2.5m
annual deal, said: "Even as a hard-arsed retail director looking
for a return on investment, it has been extraordinary."
Hitherto, B&Q had relied on an advertising strategy emphasising its
empathy with ordinary homeowners rather than an ocean-going "superwoman"
to shift its stocks of paint, ironmongery and bathroom suites.
The sports sponsorship industry in Britain has grown from £4m a
year in 1975 to £430m this year. Globally, the industry is worth
more than £13bn a year. Ceri
Glen, an analyst with the London-based consultancy Redmandarin Ltd,
said: "Sports sponsorship is about tapping into people's passions,
whether it be Formula One or David Beckham or ocean-racing.
"If people are inspired by Ellen MacArthur, they will associate that
sponsor's brand with her. It might not seem relevant when you are going
off to buy a tin of paint but it adds a dynamism to B&Q. After all,
their slogan is, 'You can do it'."
Dame Ellen makes regular appearances at B&Q store openings and gives
motivational talks to workers and management. Top-achieving staff are
even awarded a day's sailing with her.
But another sponsorship consultant said yesterday: "B&Q even
made sure she took their powertools on board to make any repairs. On one
level that is good business but on another it looks as if the sponsor
is getting greedy. Rather than make people rush to the shops, research
shows that turns them right off."
Sponsorship Winners and Losers: Winners
Michael Schumacher and Shell
Profits sank at Shell after oil and gas prices plunged in 2001, but the
drop was cushioned by the success of Schumacher, who won the driver's
championship that year. The German, in his Ferrari, fronted a massive
marketing campaign for the launch of Shell's unleaded petrol Optimax,
and won titles in 2002, 2003 and 2004, giving the company a high-profile
return for its estimated $30m (£16.1m) million a year sponsorship
deal with the team.
Jonny Wilkinson and Adidas
Adidas was quick to sign up the promising 18-year-old in 1997, but they
could not have imagined it would be an Adidas boot Wilkinson wore as he
kicked the winning points in England's 2003 World Cup victory. Wilkinson's
deal, worth £250,000 before the World Cup, was renegotiated along
with his other deals with Hackett, Tetley beer, Lucozade, Lloyds TSB and
Mercedes. He is said to have earned £4m in the six months after
the final.
David Beckham and Brylcreem et al
David Beckham remains the doyen of advertisers. Even his cock-ups have
come good for the associated brands. In 2000 he shaved off his locks,
jeopardising a £4m contract with the hair cream brand Brylcreem.
Luckily the stubble grew back and the sponsor stood by him. Last year
Vodafone was said to have considered dumping him after his alleged affair
with Rebecca Loos (particularly reports of their "text sex").
In both cases he was considered too valuable to lose.
Freddy Adu and Nike
The 15-year-old became the youngest player in a championship game in the
US in any sport when he took to the field for DC United in the Major League
Soccer cup final in November. On the eve of his 14th birthday Nike gave
the Ghanaian immigrant a $1m deal - a snip when one considers he boosted
audiences everywhere he played last year by 74 per cent. MLS signed him
on a $2m, four-year deal, the largest for an American soccer player.
Samsung and the Olympics
Fifteen years ago, Korea's Samsung was considered one of the lower brands
of consumer electronics; it is now a close rival of Sony and Panasonic.
Part of its rise has been due to membership of the International Olympic
Committee's "Top" programme since 1997. While membership sets
back the dozen sponsorship partners an estimated $40m (£22m) over
four years, it brings with it the right to use the heavily trademarked
Olympic rings.
and losers
Julius Francis and the 'Daily Mirror'
Sporting tradition has it that you back the winner, but the Daily Mirror
sponsored the British underdog Julius Francis in his January 2000 fight
against Mike Tyson. The paper paid him £20,000 to display its masthead
on the soles of his size 12s and the boxer's "243-second public humiliation"
in which Tyson knocked him down five times, should have had accountants
crowing. But rival papers and most broadcasters refused to mention or
show it.
Roy Keane and 7-Up
Roy Keane is known for his hot temper but 7-Up signed him to front its
campaign for the 2002 World Cup. The Ireland captain picked up £500,000
but his endorsement went flat because he came home before the finals started,
after a row with the manager, Mick McCarthy. Posters were ripped down
and defaced in Dublin but specifically produced cans had already been
distributed. The company said it was "as shocked and disappointed
as anyone else in Ireland".
Mike Tyson and Pepsi, Kodak, Toyota, Suntory
Tyson's sponsors - worth $4m to him annually - were eager to ditch him
after his conviction for rape and imprisonment in 1992. The prison sentence
heightened fascination with Tyson, but by the time the boxer became inmate
922335, sponsors had run a mile. Comparisons with Muhammad Ali's comeback
after jail were hogwash and "Iron" Mike blew $300m - leaving
him with $40m debt before he was beaten by the Briton Danny Williams last
year.
Pete Goss and Philips
Pete Goss's state-of-the-art catamaran Team Philips was ripped apart by
hurricane-force winds in December 2000, during a sea trial for a round-the-world
race later that month. Already plagued by technical problems, the crew
abandoned the vessel 650 miles off the coast of Ireland. Goss searched,
without success, for wreckage of the £4m, 108ft flop - half of which
was funded by Philips. Two of Goss's companies were wound up in April
2001.
Paula Radcliffe and Nike
Nike dropped the athlete Kelly Holmes when she returned home from the
Sydney Olympics with only an 800-metre bronze medal. The sportswear company
then signed a $1m (£540,000), four-year deal with Paula Radcliffe.
But Nike lost their gamble when Holmes returned from Athens a double gold-medallist,
while Radcliffe suffered a double failure in the marathon and 10,000m.
Unfortunately for Nike, Radcliffe was not able to "just do it"
in 2004.
Independent
February 2005
Related Article:
Sailing Sponsorship: Sailing Record-Setter
MacArthur May Not Prosper From Success
