Page 28 - AdNews Magazine Jul-Aug 2020

Investigation
Toyota sees enormous value in sport sponsorship
A spokesperson:
Partnering with sporting codes provides our business with an opportunity to engage with Australians in a way that can’t be done through other channels — through their own passions.
There are many different reasons brands are involved in sport sponsorship, but
for Toyota our greatest opportunity is to develop
a greater connection with fans and be an integrated part of their experience, both at an elite and a grassroots level.
Our existing sponsorships have also unlocked opportunities within traditional channels, helping us strengthen key partnerships, deliver efficiencies and of course deliver against key brand objectives.
But it’s not just value from a consumer perspective — benefits received through our partnerships also help
us to reward our incredible network of staff, dealers
and customers in their communities in various ways.
Over time, we have also been lucky enough to work with a broad range of athletes and personalities whose hard work, dedication and commitment
to progress has continued to inspire our team. These are
not only our sporting heroes, but heroes of the community who have been wonderful spokespeople for our brand.
Through the strong relationships formed during many years and the flexibility of our partners, we have
been able to adapt to support changing business needs during unprecedented times. As we return to normality, we look forward to continuing our great sporting partnerships and reconnecting with fans.
“Sports are only worth what local advertisers are willing to pay
to access their audience. It’s really that simple.”
Lisa Ronson, CMO, Coles.
However, AFL chief executive officer Gillon McLachlan foreshadowed “significant financial challenges” ahead. “We must remain vigilant on balancing investment in the next generation of participants and players while maintaining discipline on costs,” he says.
Nine and Foxtel also made substantial savings in a new broadcast rights deal with the NRL. By how much the NRL’s fees have been cut in the revised contracts isn’t clear, but it runs into tens of millions of dol- lars. The financial details of the deal are “commercial in confidence”.
But the savings for Nine in the 2020 calendar year amount to about $66 million. Nine expects to see a benefit of $27.5 million a year for the financial years 2021 and 2022.
Goldman Sachs was impressed with the rights reset, saying it “sug- gests a shift in power back towards the broadcasters as the sporting codes appreciate the value of their audiences”. The investment bank has also made estimates of how much the media players saved in rights payments (see table, page 31).
Some analysts say to watch for the big global digital platforms, such as Google, Facebook and Amazon, in the future when rights come up for negotiation again. They have deep pockets and could bring upward pressure again on the dollar value of rights.
Steve Allen, a long-time industry analyst and managing director at Fusion Strategy, says the top of the market was around six years ago.
“But sane minds did not prevail and most tier-one sports received renewal bids since then, which now, unquestionably, were way too much,” he says. “We said it then, that the successful telecasters would struggle to make any profit, and certainly nothing in the early years. COVID-19 has only exacerbated this.”
Despite the high cost of sports rights, everyone agrees that Austral- ians love their sport and that this point of connection with consumers is highly attractive.
The restart of the NRL and AFL seasons brought audience ratings wins for Nine and Seven, respectively.
“All the feedback we’re getting from partners and sponsors, and