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The sporting conundrum: do values trump dollars when it comes to team branding?
Following two major sporting code sponsorship splits, Mumbrella's Calum Jaspan looks at the relationship between lucrative brand deals and the values of players who don the logos of those responsible.
The past weeks have seen two of Australia’s national sports code bodies, Netball Australia and Cricket Australia split from highly profitable headline sponsorship deals following concerns from star players.
While both were different in nature, what does this say about the future of sporting partnerships, player power, and the risk for brands?
First, Cricket Australia and its Platinum partnership with Alinta Energy was revealed to be coming to an end, shortly after reports emerged that national skipper Pat Cummins had raised “ethical objections” to chief executive Nick Hockley around donning the brand.
Then, a month after Netball Australia secured a much-needed “lifeline” from Gina Rinehart in the form of a $15 million sponsorship deal, that lifeline was pulled after the players refused to wear the Hancock Prospecting logo on their uniforms, in support of Indigenous player Donnell Wallam over comments made by Rinehart’s father in the past.
The ramifications in the case of Netball Australia could be huge, with the body now in limbo after it was recently reported it needs to pay up $4 million in debt by next year.
Rinehart
This week the Australia Institute published new polling finding 53% of Australians support a ban on fossil fuel companies sponsoring national sporting teams, with less than one-third (32%) opposed to a ban.
The polling also found that 60% of Australians also agree that fossil fuel sponsors are in fact, the ‘new cigarette advertising’, with 27% thinking otherwise.
“This research shows fossil fuel corporations are losing their social license to sponsor sporting teams and major events in mainstream society,” said director of the Australia Institute’s Climate and Energy Program, Richie Merzian.
Speaking to Mumbrella, Colin Smith, managing director of media rights value at Global Media & Sports says both cases should have been handled behind closed doors, and that there now needs to be consistency applied when it comes down to values.
“It’s raised a real hornet’s nest,” says Smith. “Not all of this needs to be discussed, but it has got to have consistency to it. What Cummins has done with Alinta, only a few months ago he was happy to do it, but now he’s not, and the $40 million they’ve put in has now probably turned into a negative. They’ve invested money for a negative return.”
In the case of Netball Australia, there was deeper context, with Wallam understandably taking issue to comments made by Rinehart’s father 40 years ago. “Clearly in the case of Netball, somebody leaked – and as I understand it wasn’t the athlete at all – her concerns about Hancock and to do that frankly, it blindsided and cost Netball Australia $15 million.”
Smith says despite this, the situation could have been handled with greater maturity though, and that Netball Australia missed the boat in that regard, something the sport will regret.
The Dockers have worn Woodside on their jerseys since 2010
He points to the uproar from some Fremantle Dockers members’ objections to its partnership with Woodside. “Who should sponsor them then?”
“There’s a lot of discussion now about, oh well go with sports betting, well what are the societal issues of this too?”
It is not a question Smith said he expected to be asked, but it’s now a real issue, he says.
Brands will now have to think hard about whether or not they want to be aligned to a sport or not, based on the values of players, he says.
“They can say, well I’ve had a discussion and that everyone’s aligned, but then somebody new gets selected and is not – what happens then?”
In 2022, Australia’s five biggest rights-holders, the AFL, NRL, Cricket Australia (CA), Rugby Australia (RA), and Tennis Australia were predicted to generate approximately $350 million in central sponsorship revenue, up on $330 million in 2021.
Smith says players and brands need to be aligned on values
According to Nielsen, brand sponsorships in sporting events also come in as the third most-trusted advertising channel, so there is clearly value in it for brands. And this is proved as it found sports sponsorship spend has again increased in 2022, rising to 21.3% of total marketing budget, compared to 19% last year.
The most valuable partnerships in sports are those long-term deals that have now come to be associated with a particular team or sporting body. See Toyota with the AFL ($18.5m p/y), Kia with the AO ($20m p/y), and Telstra with the NRL ($15m p/y).
Among the major codes, Rugby Australia also has oil and gas company Santos as its Official Major Partner, with the name donned on the back of national team player’s jerseys. Former Wallabies captain David Pocock denounced this last year as “hard to stomach”.
The Australian Open also has a key sponsorship with Santos, worth around $3 million per year, while the NRL nets around $6 million per year from petroleum company Ampol, with the AFL also signing a major deal with Shell this year, urging fans to fill up at Shell stations in order to save money.
Dylan Alcott and Rafael Nadal promoting the new all-electric Kia EV6 at this year’s AO
Pointing to the long-standing 21-year partnership between the Australian Open and Kia, Smith says soon it will probably only be allowed to promote electric vehicles too, rather than petrol cars.
“BHP sponsors the West Coast Eagles, well you’d have to say they’re probably not gonna do that anymore. I know this is probably not popular, but our economy continues to be reliant on these things, and so does the world.”
“These things actually ensure we are addressing things like climate change, so it’s a really, really difficult situation and I’ve probably haven’t helped you with giving you a simple answer.”
So which brands can afford to partner with sporting bodies and teams now?
“Sports betting is the classic one,” says Smith. “You’ll see they can do that to get around some of the broadcast restrictions they’ve got, because I think they’re not allowed to advertise until 8.30 at night.”
This includes kit sponsorship, billboards in the grounds, and more, which as a result is allowed.
Again, Nielsen found that the sleeve sponsor on an NRL jersey is the “most valuable piece of advertising real estate in live sports broadcasting”. with LED boards in AFL games second.
Last week, both Nine and Seven were pulled up by the ACMA for showing gambling promotions during live broadcasts of sporting events. Currently regulations do not allow such promotions between 5am and 8.30pm.
The AFL has a yearly $8 million deal with Sportsbet, while the NRL’s deal is even bigger at $12 million, with Cricket Australia holding a $3.5 million deal with Bet365 too.
Wagering companies are some of the biggest advertising spenders in market now, as evidenced by the current ongoing pitch for Entain Australia which houses both Neds and Ladbrokes, with some of the biggest media agencies domestically chasing the account.
Valuable deals with the AFL and NRL give Sportsbet integrated broadcast coverage
Yet many Australians want to see gambling ads pulled from TV screens entirely, with seven in 10 Australians (71%) agreeing that gambling ads on TV should be banned, according to the Australia institute.
Is that likely?
Speaking on the Mumbrellacast this week, Seven’s national sales director Natalie Harvey indicated the relationship between TV networks and betting firms is not likely to change any time soon when asked if it would reevaluate its integration of betting into its AFL coverage.
“What’s been discussed over the last week around diversity and inclusion, I think that AFL does a remarkable job of being able to celebrate various communities in Australia. I think the sport has an innate ability to be able to bring people together, and when it comes to wagering, it depends.”
“Obviously there are different regulations that federally and locally are implemented already, and will those tighten up? That could happen, that could happen for AFL but I guess we’ll cross that bridge when we come to it if we come to it.”
For now though, until regulations are imposed, it will continue to prove a conundrum for all involved as the lines, and values continue to blur.
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