CEO Middle East

TOUR DE FORCE

As UAE Team Emirates celebrated its stunning Tour de France victory, CEO Middle East looks at the big business of sports sponsorshi­p in the UAE

- BY JOLA CHUDY

AS UAE TEAM EMIRATES CELEBRATES ITS TOUR DE FRANCE VICTORY, CEO MIDDLE EAST LOOKS AT THE BUSINESS OF SPONSORING THE WORLD’S LEADING SPORTS EVENTS. A GLOBAL INDUSTRY, WHEN IT COMES TO PLACING ITS BRANDS ON THE LIVERY OF THE WORLD’S ELITE TEAMS, THE UAE IS PUNCHING ABOVE ITS WEIGHT

While Coronaviru­s may have put a dampener on many of this year’s major sporting events, the route of the Tour de France – 3,483 kilometres spread across swathes of the French countrysid­e – rendered the world’s most famous men’s multiple stage bicycle race relatively impervious to Covid-19 social distancing.

With most of the world at home, viewing figures of the annual televised event were higher, too, despite the 107th edition of the race having been postponed for the first time since World War II. An estimated 1 billion viewers worldwide tuned in to watch Slovenia’s Tadej Pogacar, the 21-yearold UAE Team Emirates rider, achieve a sensationa­l time trial victory to La Planche des Belles Filles, putting him in the lead with an unbeatable 59-seconds lead.

While the delighted Pogacar said: “It’s unbelievab­le. It’s really crazy to be the winner of the Tour de France; this is just the top of the top,” he wasn’t the only one revelling in the victory. The leadership at Emirates Airline, sponsors of the victorious UAE Team Emirates since 2017, must have shared that moment of pure elation as they saw the exceptiona­l victory unfurl, with the airline’s logo broadcast around the globe and viewed by millions of people.

“The UAE Team Emirates’ stunning victory at Tour de France, the world’s most prestigiou­s cycling race, is a historic milestone for the UAE on the global sporting stage; This tremendous achievemen­t strengthen­s the already deep relationsh­ip between the UAE and the sport of cycling, and will inspire a new generation of cyclists worldwide,” Sheikh Ahmed Bin Saeed Al Maktoum, CEO of Emirates Group said in a series of tweets.

It’s yet another marketing coup for the airline that also sponsors leading teams in football, rugby, tennis, motorsport, golf, horse racing, baseball, cricket and sailing – a far cry from its first lone tie-up in 1987 when it lent its support to a powerboat race in Dubai.

It’s another example of the might and ambition of Brand UAE, a small desert country known around the world thanks to its formidable publicity machine; joining hands with the world’s elite athletes and sports entities is a big part of its drive to promote the emirates around the world.

“Two major sports sponsorshi­p deals that particular­ly stand out are Etihad’s sponsorshi­p of Manchester City FC and Emirates’ sponsorshi­p of Arsenal FC,” says Dave McCann, Partner at RISE, a leading regional sports, culture and entertainm­ent sponsorshi­p agency. At the time of signature, the Etihad Airways deal was valued at $462m and the Emirates deal at $257.6m.

Other notable sponsorshi­ps by UAE businesses include DP World’s sponsorshi­p of the European Tour and Ian Poulter (golf ), including the naming rights to the seasonendi­ng DP World Tour Championsh­ip. “Etihad’s recent naming rights for the sponsorshi­p of Yas Island Arena, Emirates’ global sponsorshi­p of Formula 1, Dubai Duty Free’s sponsorshi­p of horse racing events and the Irish Open Golf Tournament are all examples of big sponsorshi­p deals by UAE

companies,” adds McCann.

“There is a trend in UAE companies to take naming rights sponsorshi­ps when acquiring sponsorshi­p rights. These are generally bigger deals financiall­y, but also provide a much stronger associatio­n with the rights holder, which seems to be a major strategy of UAE businesses in order to expand their global recognitio­n. Naming rights is growing in this region and has the unique capability of putting a brand at the centre of the fan experience, as well as turning their brand into a destinatio­n. The power of this kind of engagement is unquestion­able.”

UAE Team Emirates CEO Mauro Gianetti told CEO Middle East at the end of 2019 that the team has generated $400m returns for its sponsors, who invest just a fraction of that amount.

“In general, all our sponsors, and the main sponsors world tour teams like ours, [generate] an average of, at a minimum, 5 to 10 euros for each [euro] spent,” he said.

That’s not a bad return on investment; with the latest victory at the Tour de France this figure is likely to have increased substantia­lly. While the victory celebratio­ns amongst UAE Team Emirates may have continued for several days before the demands of elite-level training beckoned once more, the implicatio­ns for what it means for the airline will unquestion­ably last longer.

Industry insight

Ben Faber is a Regional Director at CSM, a global brand and marketing company that oversees the communicat­ions for UAE Team Emirates.

“The global sports industry has grown year on year over the past two or three decades and the UAE is no different in that respect,” says Faber. “A relatively small market, it punches well above its weight in terms of sports sponsorshi­p. Emirates in particular has used sport for many years as a way of brand building in supporting the growth of their brand, aligning partnershi­ps with sport with flight routes.”

That early model – the airline entered into its first sports sponsorshi­p in 1998 – was very much the blueprint for UAE sports sponsorshi­p for many years, which has grown from a ‘chairman’s whim’ to become a highly sophistica­ted, strategic and complex business worth billions of dollars annually.

“At this level, every partnershi­p is bespoke and the most successful ones are doing it for clearly identified strategic reasons. Sponsorshi­ps can start from the most basic – such as driving awareness of the brand through global sports audiences, to more complex ones,” he explains.

In addition to running the communicat­ions for the UAE cycling team, CSM, whose clients include HSBC and Mubadala, builds sponsorshi­p programmes that include customer acquisitio­n, rewards programmes, employee engagement, loyalty schemes and more.

“In the case of UAE Team Emirates, it is unquestion­ably a global platform. In Covid times TV audiences are higher than normal. A sport like cycling can offer fantastic opportunit­ies if you are trying to engage and reward customers, from cycling with athletes to hospitalit­y experience­s, prizes and incentives. Airlines, for example, can link these to loyalty programmes for their most loyal customers. Ultimately a partnershi­p such as the one between Emirates and UAE Team Emirates will give the sponsor a huge range of assets, from merchandis­e, to access to talent, memorable experience­s and more.”

In turn, a profession­al team needs a revenue stream in order to operate as a top-tier player. The highest earners in pro-cycling, such as Peter Sagan of Team

Bora-Hansgrohe, are estimated to take home around €5.5m ($6.49m). While Pogacar has not commanded anywhere near that figure to date, his recent victory will doubtless see him command a higher wage in addition to the $642,000 prize money he received for his Tour de France victory.

Return on investment

Whereas sports sponsorshi­p in its nascent era may have relied on little more than a handshake and a straightfo­rward contract, today it is a highly complex industry.

“A majority of the sponsors we represent are very structured in terms of their return on investment (ROI) matrices,” says Steve Bainbridge, Partner and Head of Sports & Events Management at Al Tamimi & Company, the first regional law firm to open a specialise­d sports law practice. “In fact, some sponsorshi­p deals that may initially appear to be the least rigorous in terms of tangible returns can have periodic reporting and review with levers that allow for adjusted payments and/or additional benefits that can be triggered depending on performanc­e, whether that be measured in product sales, footfall, social media traffic, etc.”

The company represents rights holders, government entities, and corporate sponsors as well as a number of sports governing bodies, clubs and athletes.

“We advise on a range of issues and this can mean anything from stadium naming rights deals to club jersey sponsorshi­ps or title sponsor agreements for major tournament­s or community events and many points in between. Obvious headline issues include the deal value and duration but with respect to sponsorshi­p deals we find the greatest impact is moving much more towards partnershi­p and integratio­n of goals.”

“THE GLOBAL SPORTS INDUSTRY HAS GROWN YEAR ON YEAR OVER THE PAST TWO OR THREE DECADES AND THE UAE IS NO DIFFERENT IN THAT RESPECT”

It is clear that global sponsorshi­p is on the up and up, a billion-dollar business that in inexorably linked to the world of sport.

It is almost inconceiva­ble to any sports fan today to imagine an event without a visual cacophony of logos jostling for prime position, but a hunger for innovation also underpins the million-dollar marketing and sponsorshi­p budgets of big businesses.

“Sport continues to grow across its traditiona­l forms but also in new ventures,” notes James Leeman, the CEO and founder of branding agency, Leeman Consult.

“In the last 20 years, e-sports has become one of the largest growing global sports with an estimated total viewership expected to grow at a 9 percent between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023. Sponsorshi­p is the biggest source of revenue. Innovation to provide exposure in this could become the best way for a brand to see their required ROI. We cannot move away from our traditions too quickly though and, as the UAE and its brands and supporting companies continue to invest in sport in its purest forms, there are small but relevant changes in their ROI with correct brand alignment, innovation and social responsibi­lity coming to forefront.”

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 ??  ?? Racing for glory Cyclist Tadej Pogacar of Slovenia and UAE Team Emirates celebrate during the 107th Tour de France
Racing for glory Cyclist Tadej Pogacar of Slovenia and UAE Team Emirates celebrate during the 107th Tour de France
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 ??  ?? Team effort Pogacar won this year’s Tour de France in a thrilling fashion against world-class competitio­n
Team effort Pogacar won this year’s Tour de France in a thrilling fashion against world-class competitio­n
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 ??  ?? Advertisin­g on wheels Tour de France ranks among the biggest sporting events in the world
Advertisin­g on wheels Tour de France ranks among the biggest sporting events in the world

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