The Minefield of Selling Major Sponsorship to a CEO

Mud splatter I was recently forwarded a link to a video showcasing how Chelsea Football Club went about replacing their principal partner. The link was accompanied by the message, “I bet this will make you sick.” He wasn’t wrong.

I will say that Chelsea FC was successful in gaining a new principal sponsor in Yokohama, and well done to them. I don’t know if this approach was used on Yokohama or not, but either way, I wish them both a long and fruitful relationship.

That said, there are still some serious issues raised around this approach, and those issues are exacerbated by the decision to publicise it.

Before I make my case, you should probably have a look:

Chelsea Football Club – Get Me a Sponsor (I found a working link – for now!)

The above link may not last. Sometime between me publishing the original version of this blog on 2 December and spotting the broken link on 14 December, Saatchi & Saatchi removed almost all copies of their “Get Me a Sponsor” video from the web. In case the above link dies, I’ll give you a quick recap…

The shamelessly chest-beating video went over how Saatchi & Saatchi developed a campaign for Chelsea FC, whereby 33 CEOs of some of the world’s biggest companies received a fancy, “Chelsea blue” trunk containing a customised jersey, a medal, and a fully customised, point-of-view video showing what it would be like for the CEO, if their company became the new shirt sponsor of Chelsea – chauffeurs, press conferences, meeting the players, going onto the field, that CEO’s signature on the contract. It was accompanied by a voiceover saying things like, “companies don’t make quarter of a million pound decisions based on logic alone”, and “we wanted to show CEOs how their lives would change as a sponsor of Chelsea Football Club”. (Quotes are from memory and may not be exact, but they’d be very close. I have nightmares about them.) This was all delivered with a huge dose of “aren’t we bloody clever”, and the whole thing was revolting.

This thing won awards – no doubt selected by people who value implementation over consequences. What consequences? Try these, for a start…

Cue political nightmare

Companies don’t make £250 million (US $376 million) decisions based on logic alone? Gee, corporate boards and shareholders are going to be glad to hear that!

And I’m sure staff will be duly impressed that when such massive investments are made, they benefit the CEOs so, so much. Actually, what they’ll be doing is maths; how much pay, bonuses, or benefits could staff be getting if the CEO wasn’t playing fast and loose with hundreds of millions of dollars.

And then there are the marketers, who always enjoy when the C-levels raid their budgets for vanity projects – and it would be extremely difficult to make a huge sporting sponsorship like this look like anything other than a vanity project after seeing that video. Just imagine their level of excitement and buy-in when this sponsorship is imposed from above and they’re told to make it work. They’ll be doing the maths, as well: What else could we be doing with this money to advance our brand? What’s the opportunity cost of our CEO’s good time?

And then there are the marketers, who always enjoy when the C-levels raid their budgets for vanity projects – and it would be extremely difficult to make a huge sporting sponsorship like this look like anything other than a vanity project after seeing that video. Just imagine their level of excitement and buy-in when this sponsorship is imposed from above and they’re told to make it work. They’ll be doing the maths, as well: What else could we be doing with this money to advance our brand? What’s the opportunity cost of our CEO’s good time?

The thing is, CEOs are involved with some huge sponsorship decisions, and most CEOs put a lot of care and consideration into those decisions. But even if that is 100% the case, imagine that a decision like this is made, and then this video makes the rounds of staff. Everything is done by the book and there is still a political mess because of the perception it creates.

Whether Yokohama is dealing with any of these issues or not, the fact that this approach has been promoted in such a blatant manner creates a question mark over whether top-level sponsorship investments are really made for strategic reasons. That’s not helpful for anyone.

And then there are the actual politicians

This reminded me of the TARP funding paid out to financial institutions in the US during the Great Recession (2008). Many politicians, including (then) Senator John Kerry, were insisting that none of that money should be put toward sponsorship, because it was an unnecessary, unjustifiable expense with the main benefit to companies being overblown hospitality. The term “fat cat” was bandied about freely.

At that time, I jumped to the defence of sponsorship, stating that it is a powerful and accountable marketing tool, not a slush fund for fat cats. I did concede that some sponsorship is wasted, and not all companies are good at it, but those bad apples didn’t taint the whole barrel.

But here’s the rub. This video showcases in all its high-production-values glory that this sponsorship IS all about being a fat cat. Here’s you at the press conference. Here’s you meeting the players in the locker room. Here’s you on the field. In media and politics, it’s not a big leap to categorise all major sports sponsorship in the same way.

Companies of the size this video is talking about often get huge tax and other government concessions. They’re already political targets for parliamentarians and political crusaders, who could easily juxtapose this unsavory take on major sports sponsorships with the taxpayer-funded concessions being made to the companies involved. And won’t that be fun for the media relations team?

Devaluing sponsorship investment

The clear implication of this video is that a sponsorship of that size is unjustifiable, when logically analysed. In fact, it says pretty much exactly that. That further implies that…

  • Major sporting organisations are so greedy and/or delusional that they can put an illogically high price tag on something and not even have to make a business case.
  • None of the rigour and accountability demanded of sponsorship in 2015 applies if the CEO wants a signed jersey and photos with a superstar bad enough.

In the vast majority of cases, neither of the above is true. I know that, and you probably know that, but there are plenty of media, bloggers, and social media pundits who probably don’t, and the implications of this video make for a good story – one that pulls our industry’s image back to the bad old days of ad hoc, “luxury spends”, retrofitted objectives, and justification based on the debunked practice of measuring logo exposure. This is embarrassing for our industry.

The upshot

Super-cool use of tech aside, do I like all the virtual arse-kissing? No. Would I rather Chelsea FC concentrated their efforts on building a business case that a whole company (and all the fans) can get behind – a business case worthy of £200 million? Of course. But I actually have less of an issue with the approach taken by Chelsea FC than I do with the choice made to publicise it in this way.

Let’s say for a moment that there is something in this approach that might have given Chelsea FC a look-in. I honestly don’t know – this may have been how they started with Yokohama. The fact that Saatchi & Saatchi decided to publicise this strategy in this way has unfairly painted major sports sponsorships as both not logically justifiable and, frankly, more than a bit unseemly. All it would take is a credible journalist with an axe to grind, and that video becomes an expose. I’m glad the video is down now. I’d like to think maybe someone alerted them that they’d thrown their client and big sponsors under the bus and common sense prevailed.

You’ll note, here, that at no time have I ever said that being principal sponsor of Chelsea FC isn’t worth a ton of money, because it is, and I hope Yokohama gets amazing results against their global objectives from their investment. But the fact that this strategy was undertaken, and particularly that this video was out there and getting plenty of attention for the better part of a year, could make investing in top level sports sponsorships just that little bit more difficult for any major CEO.

And I really hate that.

 

© Kim Skildum-Reid. All rights reserved. For republishing information see Blog and White Paper Reprints.

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