Big Bash’s big boom: Will success see its sponsorship and broadcast dollars double?
The move to free-to-air TV has propelled the Big Bash League into the big time. Simon Canning spoke to Cricket Australia exec Mike McKenna about the future of the competition’s sponsorships and broadcast deals.
There was a danger after a distinctly mediocre first couple of years the Big Bash League was set to be an expensive disaster for Cricket Australia, with millions in marketing and team investment down the drain.
Fast forward to today and executives running the league say they are now “three to four years ahead” of where they expected to be after a sensational summer that could see the value of sponsorships double and the price of broadcast rights skyrocket.
Mike McKenna, executive general manager of operations at Cricket Australia told Mumbrella the increases across a range of metrics had been a surprise, even considering the work that had been done to bed down and promote the eight-team competition.
The Melbourne Stars secured Optus as a new sponsor in 24 hours
He said the ability of the Melbourne Stars to secure a replacement sponsor in Optus after the collapse of Dick Smith in just 24 hours last week was a testament to the growing value of the sport.
“It’s fair to say that some of the increases we have seen this year have delighted and surprised us,” McKenna told Mumbrella.
“At the same time we have had a pretty fierce strategy since we launched Big Bash League. We are probably three or four years ahead on some metrics compared to where we wanted to be. In a lot of ways it just comes down to simple marketing.
“We had a challenge with cricket and particularly with kids and we needed to find a product that appealed and we needed to package it and market it in a way that hit our target audience.
“We believe the results are predictable, but the time frames have been very exciting for us.”
The BBL was conceived as a way to grow cricket audiences by targeting women, children and families directly with a fun and easily accessible form of the game that also translated simply to broadcast.
TV viewing knocked for six
However things started very slowly for the game. An exclusive broadcast deal with Fox Sports in its first three years saw its public exposure severely limited, with smaller than expected attendances and comparatively tiny TV audiences in what should have been a fallow time of year.
Now one of the biggest challenges faced by CA going forward – albeit a welcome one – will be future of the broadcast rights.
For Network Ten grabbing the exclusive rights to the sport in 2013 has proved one of the shrewdest moves made by the network in a long time, giving it a huge shot in the arm going into 2014 as it continued to rebuild. And the commitment to the sport has paid off handsomely this year in its summer audience figures.
Described as a “‘consolation prize” when the network secured the rights in 2013 for $100 million, the value based on this year’s numbers has the potential to double as a result of the audience growth.
While some critics have accused free-to-air networks of all but abandoning viewers this summer with weak schedules, the Big Bash has proved a consistent ratings winner for Ten.
Analysis by Fusion Strategy has seen metro five city figures regularly up by more than 30 per cent on last year, while the sport has regularly seen audiences in the five capital cities of between 900,000 to 1 million.
McKenna admits it is strong position from which the sport can begin discussions on the future of its broadcast agreements. Competitive tensions will add to the growth potential.
“The conversation with Ten, and Nine and others is an ongoing conversation about cricket because we do have lots of products,” he said.
Current BBL rights holders Ten will face competition to keep them
“We have two years to go on the contract with Ten and in the not too distant future we will sit down and have a conversation. We know about other parties in the marketplace that have an interest. Before the first year of Big Bash we had a similar discussion about having some or all of it on free to air versus cash.”
CA uses the cash from broadcast agreements to support the growth of the game in the community so will have to balance the success of its offer on Ten this year against the ability to invest in the future of the game.
Given Foxtel’s recent investment in Ten it is likely the two companies would strike an accord to split the rights, helping boost the Fox Sports platform which suffers in the summer from a lack of premium local sports content, and is set to lose the English Premier League after this season to Optus.
“At some stage there is an equilibrium point you reach between the exposure you get from free-to-air and the money you get from being on a subscription platform. We won’t know that until really late in the piece,” adds McKenna.
While refusing to be drawn on price he admitted there was a much wider number of people who could be involved in broadcasting cricket than ever before based on the entry of players such as Optus, which grabbed broadcast rights to the EPL last year and has an exclusive mobile content agreement with CA.
“Our media rights team will be looking at that before too long,” said McKenna.
The impact on sponsors
CA’s Mike McKenna believes Big Bash sponsorship value could double
Success this year has changed the way in which sponsorship of the sport is being viewed, with McKenna admitting that selling sponsorship opportunities “has taken a little while for organisations, particularly agencies, to actually believe what they are seeing”.
“We can now prove that it is not a flash in the pan,” he said.
As a result, McKenna predicts that the value of sponsorships – both at league level and with individual teams – is about to skyrocket.
At the launch of the league CA used brand measures such as Repucom to benchmark what the potential of the sponsorships might be, and since launch the BBL has exceeded it’s predictions.
“What other broadcast program is going to give you a million viewers plus every day of the week for six or seven weeks,” he said.
“That is really valuable. We are just beginning to see the value of the teams and the league. Originally we weren’t very sophisticated in our selling, we didn’t have great reach. The first year we were trying to sell a speculative offer and nobody really bought into it.
“If they sold the principle sponsorship two years ago and they are just coming out next year then you are talking about 50 or 100 per cent increases. At the end of the day they are all worth what someone is willing to pay for them. The thing is the league is no longer a secret.”
He said that given the track record of out-performing predictions, even with a massive jump in the value of sponsorships, the new deals would still represent a bargain.
The flagship KFC Big Bash sponsorship still has two years to run, but CA has been having ongoing discussions with the brand about its future involvement.
Lawson says Big Bash has given KFC authenticity
The fast food brand has used the league as a platform for it’s cricket themed HCG ads.
“We are always talking… but the formal negotiations will be at least several months out. It’s much easier of you are talking to an incumbent,” McKenna said.
https://www.youtube.com/watch?v=63dpUPWA4Yk
The value of sponsorships has been further boosted by the revelation this week that the Big Bash has entered the top 10 most attended sports in the world with an average gate this season of more than 28,000 people.
That includes a world record 80,000 strong crowd which turned out for the Melbourne derby at the MCG on January 2, which dwarfed the 52,000 who turned up to watch the first day of the Boxing Day test at the same venue on December 26.
Family friendly gamble
Two areas of potential revenue that have been important for broadcasters with sports platforms in recent years have been gaming and alcohol.
However, with Big Bash, CA is actively distancing itself from the sectors in a bid to remain true to the needs of its target audience – something that has limited Ten’s ability to draw ad revenue for the sport.
“You morally can’t have a gaming organisation attached to it,” McKenna said.
“There is a place for gambling and sport, and it is a relevant place, but certainly not when you are targeting your sport at kids.”
CA takes a similar stance with alcohol, but is also having to deal with some legacy sponsorships struck by teams
“We just take a position that we won’t have an alcohol sponsor but we do have pre-existing alcohol partners with some of the teams and we are talking to the teams about the appropriateness of that. Going forward league policy is we won’t accept a sponsorship for the Big Bash from an alcohol company.”
While CA does not have the ability in its agreements with teams to mandate no alcohol sponsorship McKenna said he believed the position of the sport was now strong enough that team sponsorship managers will be able to replace beer brands when contracts roll over and still grow the size of the package.
Simon Canning is marketing and advertising editor at Mumbrella
CA has made a very shrew move and its time is perfect. Because of the entry of Netflix and a range of other streaming services, free to air TV is now running much more live sport – especially on their multi-channels. Seven is running NFL for the first time ever!
Sport will help defend the networks (no, they are not about to disappear!) and sport will be a winner too.
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Kudos to Cricket Aus for not taking gambling and alcohol money for the big bash. Bloody vultures trying to influence the youth I tells ya
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