Sports sponsorship and the rugby sevens event stakeholder network

Sports Sponsorship

Sport Sponsorship

Analysis of Event, Sponsor, Consumer Relationship

Private organizations may be enticed to provide a share of the funding necessary to design and construct a sport facility or support the planning and operational phase of an event until the first revenues arrive. Companies may become involved in financing for three chief reasons. First, the company may seek to provide a facility within which to deliver its own products or services or its own major event. This is essentially a method of vertical integration.

Event

A sport organization may wish to construct a facility that can be used to house its own events: The Rugby Sevens. The relationship can also work the other way around: for example, a facility might independently organize events to help contribute towards better- capacity utilization. Many larger multi-purpose arenas not only solicit the interests of event promoters but also operate their own event departments, which develop and run new events (Quinn, 1982).

Key Sponsor: HSBC

Sponsor Attributes

Clearly, their margins in these events are excellent because of the fixed venue costs. Most facilities, however, do not seek managing events as their core business. Alternatively, a television network may supply money for a stadium in order to secure exclusive rights to televise the hosted activities. Or a company may contribute to a sport facility's construction in order to obtain advantageous associations as well as carefully positioned exposure. This sponsor- ship option may include naming rights to the facility and advertising and signage space around the facility, including the scoreboard (Abratt, et al. 2007). Second, companies may commit financial support for no other reason than as an investment opportunity. Sometimes this comes in the form of joint ventures between the real estate developers involved in different aspects of the project. For example, some might specialize in hotel or night club developments, and can be enticed to invest in a new facility. A third option is to raise money by selling portions or shares of the facility to the general public (Bagozzi, 2009).

This has rarely if ever been attempted with sporting events, although in theory the idea has merit for the same reasons that it works with a facility. The only troublesome issue is that the legacy of an event does not have the same tangibility as that of a facility. Larger events companies, rather than any single event, have been publicly listed. The mechanisms governing company 'floats' are sophisticated, varying from country to country, and will not be discussed here.

Node Structure Attributes

The growth and professionalization of events has meant that these now serve a multitude of agendas, reflecting government objectives, regulation, media requirements, sponsor needs and community expectations, among others (Baldwin, 2006). A number of stakeholders are present in the event, all with various needs and conflicting demands. The success of an event can be achieved through the way in which these needs and demands are balanced. The event bidding process is also faced with this range of stakeholder expectations. With this diversity of stakeholders, there are a number of ways in which the event bidding team can be presented and structured.

Different structural types such as simple organizations, functional or divisional groups, matrix organizations, networks as well as other configurations are also present. Although event bidding teams may be formed with particular structures that suit one of the above possible types, it is worth looking at the network aspect of the event bid team process in more detail (Bagozzi, 2009).

Fig. 1.1 Node Organizational Structure

This is because major events predominantly epitomize a virtual corporation in which, though relationships may be ongoing, they remain more informal, less structured, and thus more dependent on consistent performance to ensure recontracting in the future. Some events can be seen as an extreme form of virtual organization because the participants come together, literally, only once a year to stage the event and then immediately part ways until the following year (Waite, 2002). At the more extreme end, the participants come together once and then disband the organization completely (which occurs with the Olympic Games). This virtual corporation relationship is true of event bid commit- tees, where the level of interdependence of partners is substantial, with organizations coming together to support and enhance the bid, ensuring a high degree of resource and competency sharing. After the bid process these organizations disband the relationship formed and develop or seek new arrangements.

Consumer Market Segments

Incorporating the key success factors identified by Bagozzi, (2009) internally the bid team can maximize its composition through the inclusion of key experts in order to convince the event promoter that there is sufficient expertise and capacity within the bid team to successfully develop the requirements relating to the event. Technical expertise reflecting equipment and staff knowledge is an important element in the bid presentation. Externally, the bid team can develop political support and access to major infrastructure projects in support of the bid. The introduction of these key resources through relationships with key individuals and organizations strengthens the relationships that the bid team is seeking to form with the event owner. Primary relationships associated with the event bidding team clearly emerge when analyzing the network process (Wakefield, 1995). These primary relationships often include the integration of the event owner and event bidder into groups such as the national sporting organizations (NSOs), state sporting organizations (SSOs) and even event participants. Primary connections enable enhancement of the focal relationship. For example, a bid team forming an alliance with organizations representing athletes such as players' unions or athlete management companies would do so in order to strengthen its organization with high-profile identities to place its bid at the forefront in political, media and profile terms.

Secondary connections, involving links between key dyad partners, can also be formed. Secondary relationships can be represented through such groups as sponsors and the media. The capacity for these groups to develop relationships within and across boundaries is an important process in the development of a successful bid. Local media brought in by the event bidder and international media brought in by the event owner may represent such a secondary relationship. Media and sponsor groups representing the local community have a clear role to play in their tertiary relationship with the bid team (Wallendorf & Arnould, 1991). Positive involvement of the media will have an effect on the communication and exposure that a bid team receives. The media can enhance the support from community and consumer groups and deflect any animosity presented by special-interest groups with anti-event sentiments. Finally, tertiary connections may be introduced to the network.

Enhancing the Relationships

Convincing the event promoter that the host city has the necessary infrastructure for the event to be successfully held in that city plays an important role in the success of the bid. In the network, the relationship between the city (or host) and the existing infrastructure that it provides and the bid team is an important component (Bagozzi, 2009). The link in the network between the event team and facility management is clearly identified here. A strong relationship is of significance during the period of the bid in order to ensure that all parties are fully supportive of it.

Attracting New Markets

The bid application process is clearly a cyclical one in which the members of a bid team must ensure that they themselves have sufficient expertise and experience, coupled with support in the form of other personnel, whether political, media or general community support. Added to this must be a suitable infrastructure already in place and the capacity to present all of this information in a way that will make the bidding organization appear attractive to any decision makers. There are a number of key issues that face the bid team in presenting information, but the critical components surrounding political support, contracts and obligations, finance and financial management, safety and security, stadia and support infrastructure, media, accreditation, ticketing, sport support services and community support services must be covered in order to present and develop a successful bid (Witcher, et al. 2010).

Current Communication Strategies

Aspects for consideration during the concept and planning phase include:

* Event date usage schedule. The event date must be identified early, with arrangements made to ensure the facility is available for that date. The facility will have bookings with tenants and special contractors that may extend years in advance. It is necessary to identify the availability of the facility with sufficient lead-time to ensure that a booking can be made. This date should be checked and double-checked to ensure there are no problems at a later date (Kotler, 2001).

* Information exchange. It is crucial for the efficient management of an event that the parties responsible for running the event meet with facility management and exchange ideas and information. There may be the opportunity for the facility experts to provide a better way of achieving the event objectives, given their experience in running similar events. Equally, the event organizers will be better placed to ensure that their wishes are met if there is a consistent and regular exchange of ideas (Macnow, 2005).

* Research. The more knowledge that all parties have about the event, the operations and support available, the better placed event organizers and facility managers will be to ensure a successful outcome.

* Negotiation. Each party involved in the event will be keen to maximize their respective out- comes. Negotiation will occur during the contracts phase (Meenaghan, 2004). It is important that this process result in a fair outcome for all parties, otherwise there is likely to be resentment and the potential for a less than desirable effort put in by the aggrieved parties. Once negotiations are finalized, it is important that all parameters be included in contract negotiations (Witcher, et al. 2010).

* Contracts. A standard contract between the facility and event organizers should be drawn up and enforced. It is important that this agreement clearly state what each party will deliver. There is no point in coming back to the facility to request that they open up the pressroom after the event if there was no mention of this in the original agreement. All conditions and requirements should be identified during the information, research and negotiation stages and included in the contract.