Reputation, Integrity and Value: striking the right balance with sponsorship and advertising in sport
Jonny Gray, Senior Managing Director – Ankura
Lorynn Demetriades, Senior Managing Director – Ankura
Todd Kline, Chief Commercial Officer and Board Member – Tottenham Hotspur Football Club
Nevena Vukasinovic, Lead on Influence – BCW
Jonny Gray outlined the parameters of the discussion: “The interaction between brands and rights holders. ESG, financial sustainability, EDI, corporate responsibility. This is about balancing opportunity and risk.”
Regarding financial due diligence he said: “The sports sector has some way to go.”
Gray highlighted some recent high profile failures in the relationship between sport and sponsors.
- The collapse of FTX, who had multi-million dollar links with a wide variety of sports.
- The collapsing Inter Milan deal with digitalbits, a crypto currency, who became shirt sponsors. “Inter haven’t received any payment for these sponsorship deals.”
Gray said: “It also works the other way. Phoenix Suns owner Robert Sarver had years of allegations around his conduct. PayPal decided to end their sponsorship. Sarver had to leave.”
Gray emphasised how the power dynamics are changing. He explained that Kylian Mbappe feels players should be consulted before sponsorship deals are done. He outlined a Netball Australia deal with a mining company, Hancock Prospecting. The players refused to wear the sponsorship, and the deal collapsed.
Gray also spoke of the importance of planning and communications. He related the tie-up between Shell and British Cycling. Widespread public criticism led to the CEO of British Cycling losing his job.
Things change he said: “Tobacco, betting..what next oil and gas?”
Todd Kline spoke of the nuances of the decisions that have to be made: “Everything is shades of grey. Nothing is black and white any more. We want partnerships, not sponsorships.”
Nevena Vukasinovic picked up on Gray’s point about how everything changes: “Blockchain and digital transformation of the world is the future, less so oil and gas,” she said.
Grey raised the point: ”How do you partner with the right blockchain and crypto company?
Lorynn Demetriades agreed this was important, but sometimes difficult to establish:
“Resources affect the due diligence you can do. Sporting organisations are not insulated from rising financial pressures.”
Kline underlined the difficulty: “People get fooled. The criminals are good at what they do! You have to set a framework of what is acceptable. If you are not proud of what they stand for then maybe you shouldn’t be reaching out to them.”
The panel members discussed the importance of shared values around sustainability and equality, diversity and inclusion in the relationship between organisations.
Kline said: “We’re going to work with people who share our values around ESG and EDI.” Referencing the recent announcement of Tottenham’s development of a karting track at their stadium, he said: “We align with Formula One.”
“Ethics are non-negotiable.”
Demetriades emphasised the important of research. “How do you get to know them on a personal value? Legacy brands have baggage. Some of these organisations are on a journey.” She suggested older businesses should conduct reverse due diligence on how they have conducted themselves in the past. “Trying to hide and deny it is no longer acceptable.”
Vukasinovic suggested that brands have the opportunity to set the pace in this area, and not wait for legislation. “CEOs of the brands should be proactive and take the lead ahead of their governments.” She suggested an obvious target: “It is the moment for brands to transform women’s sport.”