The Challenges Ahead

So at long last, John W. Henry and New England Sports Ventures have completed their purchase of Liverpool Football Club, assuming control from Tom Hicks and George Gillett, and ushering in what we hope and pray will be a new, and prosperous, era for Liverpool.

Liverpool's on-field struggles under the previous regime - falling from reaching two UEFA Champions League finals in three years, to ending last season in a bitterly disappointing 7th place in the Premier League - was overshadowed perhaps only by massive debt burdened onto the club, and the crippling loan repayments which crippled the club's financial well-being and undermined both transfer dealings and hopes of building a new stadium on Stanley Park.

But, for all of the difficulties suffered by the club and it's outstanding support over the past three years, the club has been, by any measure, remarkably successful commercially. From a marketing perspective, the appointment of Ian Ayre was particularly astute, as his stewardship over the club's marketing, sponsorship, and commercial affairs has driven the club's revenues to new highs, seen record breaking sponsorship deals agreed, and furthered Liverpool's push to be amongst the biggest and most successful world football brands.

Unfortunately, the benefits of this growth and development have never been fully felt by the club, due largely to the mismanagement of the club at the highest level, and the massive debt leveraged onto the club by the ownership group. So the question now is, under new ownership, and without the debt payment commitments that have saddled the club's finances over the past two years, just how big can Liverpool grow? And perhaps just as importantly, wait challenges await NESV upon entering Anfield?

At first glance, there are a number of similarities that can be drawn between NESV's acquisition of Liverpool and their purchase of the Boston Red Sox in 2001. Both are successful, massively supported on both a community and an international basis, steeped in tradition and history. Parallels too can be drawn between the cities of Boston and Liverpool. But equally, NESV acquired both storied clubs at a crucial and difficult time, with questions regarding both clubs' competitive prospects, the state of stadia, and chronic mismanagement over recent years.

So what lessons can we take from NESV's stewardship of the Red Sox thus far? And what challenges and opportunities lie ahead for Liverpool? Well on the evidence of both this fall's interaction between Henry and the Red Sox nation (Boston's ownership took out a full page newspaper ad to apologize for the club missing the postseason), and the early interviews Henry has conducted regarding Liverpool, and his outreach to fans through Twitter, it would appear that regaining the support, trust, and confidence of Liverpool's incredible international support is a key step forward. Under Hicks and Gillett, that trust and interaction was lost, with a growing contempt for the owners leading to protests, constant speculation, and persistent questions over the club's future. Such negativity surrounding Liverpool can only have hindered the club's commercial potential, as well as adding to the performance pressure on the players. Removing the barriers that exist between the supporters and the club is crucial to Liverpool's success, and early indications are that public and community relations will be an important first step for NESV on Merseyside.

The second important issue to be resolved by NESV will be the decision to renovate Anfield or construct a new stadium. NESV's portfolio and past history in sport suggests that the new owners won't rush into any decisions, and have experience both with redeveloping existing stadia, and building brand new, state of the art facilities. The City of Liverpool have already gone on record voicing concern over NESV's decision to consider all of their options, including renovation, believing a new 60,000+ seat stadium in Stanley Park to be integral in the regeneration the area. Under similar circumstances, Henry et al decided against a new stadium upon taking over the Red Sox, and instead invested heavily and intelligently into Fenway Park, one of the most historic and iconic ballparks in the world. However, around Fenway the ownership group have also redeveloped much of surrounding area, making Fenway as much a destination as a stadium, capitalizing on non-matchday revenues, and creating added value for the gameday experience.

How NESV will approach the Anfield/Stanley Park situation will ultimately define the success of their ownership of the club. Currently Liverpool earn millions less per match than rivals such as Manchester United or Arsenal, due largely to a lack of corporate suites, limited capacity, and outdated facilities. Raising matchday revenues, and regenerating the local community in order to drive non-matchday revenues (particularly as Liverpool will enjoy half the home fixtures the Red Sox currently do) will be a key area of concern, and one worth watching.

Happy Thanksgiving!

To everyone back home in Canada, Happy Thanksgiving! Please save some stuffing for me...

As seems to be becoming a regular occurrence, all has been quiet on the blog front of late. There have been a few things I've been tempted to post, a few stories/opinions/details about the radio silence that I considered voicing, but I elected against it. Work on my ambushing research, as well as a number of concerns outside of work and research and the like, have kept me away from BSM a bit longer than I would have liked, and certainly longer than I had planned. But, it's time to move forward.

For anyone who knows me or follows the blog, it will likely come as little surprise that I have two great loves in my life: hockey, and football (or soccer for my turkey-eating friends and family). This past week may well prove to have been a fantastic week on both accounts, though to what extent remains to be argued in a British courtroom this week. As well as stepping back out onto the ice and beginning the new season finally on Monday and Tuesday, it was announced this week that New England Sports Ventures, the owners of the Boston Red Sox and a number of other top sports properties state-side, has agreed a sale for my beloved Liverpool FC, pending a legal battle between the club's current beleaguered owners and the LFC board.

Should the sale go through, and court find in favour of the board, NESV's arrival at Anfield has been suggested as ushering in a new way of thinking into Liverpool's football operations, and extending the current growth of statistics and performance measures currently being used at clubs like Arsenal. NESV, who turned the Red Sox's fortunes by employing one of the founding fathers of sabremetrics in baseball, and a GM who studied under Moneyball's biggest proponent, Billy Beane, may well attempt to employ the same measures and metrics into Liverpool's football operations, it has been suggested, following the template which brought the Red Sox their first World Series' since the Curse of the Bambino.

Whilst in baseball, the use of metrics and moneyball-style performance tracking and measurement has become increasingly common, in other sports it remains a growing trend, but an interesting one. How it will impact and translate to a sport such as football, which is much more free-flowing and dynamic than more statistics-friendly sports like baseball remains to be investigated in earnest, but if the use of metrics in hockey are any indication, there would appear to be some value in its application. Over at Kukla's Korner (mandatory reading for any self-respecting hockey fan), the use of sabremetrics in hockey has been employed and studied increasingly over the past year, providing some suggestion of the value it may offer football clubs.

That said, dynamic sports such as football and hockey remain particularly difficult to measure in statistics alone. Greater exploration of the applicability and nature of metrics in sports such as hockey I think would be extremely useful, and I look forward it. Whilst we can measure a goalie's save percentage, and even adjust the percentage for a number of factors which may prove more telling in evaluating performance, can we or will we also adjust for the competition? For the players in front of the goalie? For the difficulty of shots? For the situation/context of shots and saves? All of this is possible, and how much it is in use already I don't know, but I think the deeper we look into performance measures in this way, and the better we explore and understand WHY metrics are used, and HOW, the more we may understand just how valuable NESV's secret weapon may be in restoring Liverpool to past glories.

The London 2012 Olympics: Brought to you by... CoverGirl??

This week the IOC announced a new sponsorship agreement with international conglomerate Procter & Gamble, a ten year pact which will see P&G join the IOC's TOP sponsorship programme for the 2012, 2014, 2016, and 2020 Games. As well as being amongst the biggest and longest sponsorship agreements in Olympic history, the P&G sponsorship is intriguing on a number of levels.

First and foremost, Procter & Gamble as a parent company own a portfolio of over 40 brands internationally. Whilst the rights allocated to P&G have not been made widely available and known, it will be extremely interesting to see what allowances the company have secured from a marketing perspective, and how the company intends to leverage the IOC affiliation from a marketing perspective. One of the key issues Olympic officials have encountered in recent years (and in some ways, created for themselves), has been the proliferation of marketing clutter surrounding the Games. Ambush marketing, despite their best efforts, continues to grow internationally, and show no sign of abating. Moreover, the growing number of official sponsorship opportunities available with the Games (the 2008 Beijing Olympics boasted no less than 63 official corporate partners are various levels), has further complicated the sponsorship environment around the Olympics, and added further complexity to an already difficult industry. How an added 22 officially associated brands - should P&G have the rights - will only compound an already crowded market.

Second, over the past two summers P&G, and specifically chips brand Pringles, one of the key brands expected to benefit from the Olympic sponsorship, have become rather prominent and ambitious ambush marketers. Their campaigns around the 2009 Wimbledon Championships and 2010 FIFA World Cup were much celebrated within the ambush community, and seen by many as a signal of intent. How P&G, Pringles, and the IOC now manage that reputation and brand image should prove worth monitoring.



P&G have been involved with the Olympic Games in the past, specifically in sponsoring the US Olympic Committee, so certainly the foundations exist for a successful partnership. Moreover, few companies boast the international portfolio and awareness as P&G, which bodes well for their own marketing efforts and sponsorship activation. However, in adding another 40+ official brands to the Olympic stable, including a recognized and growing ambush marketer, the challenge has been set...

A Question... Part II

How do sponsors feel about the ambush marketing protecting measures being enacted and utilized by commercial rights holders and event organizers/local governments?

Obviously, as ambush marketing has emerged and grown, and as increasingly the media has become aware of major instances of ambush and attention surrounding such campaigns have grown, sponsors and rights holders have worked in tandem to combat ambushers and protect sponsors better.

But how do sponsors feel when such measures are enacted and put to use? Is it to the benefit of sponsors for rights holders to pursue legal action against offending brands? Would Budweiser have looked fondly on a prolonged court battle between FIFA and Bavaria? How would the public perceive Budweiser should the women accused by FIFA of ambushing been sentenced to jail time? Already those aware of the legislation in place for the London Olympics have protested against the counter-ambush measures in place, as did Vancouver citizens and businesses in regards to the Vancouver Games legislation. South Africa's own protection is regarded as one of the strictest and most draconian in the world, offering sponsors and rights holders swift action and harsh penalties for those found guilty. But for whose benefit?

While protecting sponsors and the investment made by official partners into major sporting events such as the Olympics and the World Cup is of the utmost importance in the current marketing environment, one has to wonder how favourably consumers would have perceived a strict sentence against the Bavaria Dutch Dress girls.

Thankfully we may never know the true extent of such legislation's impact on consumer opinion. Nevertheless, consumer reaction to both ambush marketing and counter-ambush marketing strategies remains both an intriguing and contentious area worthy of our attention, and perhaps further study...

A question...

I've kept pretty quiet about the Bavaria ambush at this month's World Cup - between the hundreds of the stories already out there on the subject, the misinformation and misdirection put out there but those in the know, and claiming to be in the know, and wanting to see how everything played out prior to commenting, I thought it best to bite my lip and see what more the Finals may have in store for us.

However, one thing about the Bavaria case which has interested me since it first made news, but hasn't yet received any major coverage, is the impact the media circus surrounding Bavaria's ambush, and FIFA and the South African government's subsequent legal action, has had on Budweiser's sponsorship?

As nearly every media report on the Bavaria ambush made mention, Budweiser is the official beer sponsor of the World Cup, and they've paid a massive amount of money for those rights. But what impact has the added exposure in the media, and constant affirmation of Budweiser's official status, had on their ROI? Moreover, would such a study reveal an unintentional impact of ambush marketing not previously suggested in the academic world? Past thought and opinion - particularly the opinion held by those within the major sports federations and commercial rights holders - has been that ambush marketing has a parasitic effect on sponsors, that it devalues their association and their investment by confusing consumers and distracting from the official sponsors who fund these mega-events.

If as I suspect, however, Budweiser's sponsorship has ultimately benefitted from the added media coverage, exposure, and identification in the media, could this Bavaria promotion not ultimately have benefitted the Anheuser-Busch brand in some way? How many who witnessed or have followed the Bavaria story confused the Dutch company as official sponsors? While the campaign certainly distracted from Budweiser's sponsorship, the media has ensured that their association has remained in the spotlight.

It would be interesting to know the impact of such campaigns when dealt with in this way. The media coverage benefitted both Bavaria and Budweiser ultimately, providing exposure above and beyond what either company had bargained for. Due to the heavy-handed way in which South African government handle ambush marketing, Bavaria equally emerged as a sympathetic figure in the press, and the women arrested as victims of the law. Certainly there's more than meets the eye to this story...

Time Flies...

It's amazing to think how long it's been since I lasted posted here - though I suppose looking at the growing time between posts as the blog has developed, a prolonged absence was maybe not entirely unexpected. While a number of reasons, mostly work-related, have contributed to the blog's inactivity and my own growing disinterest with the work here, I won't say too much on the subject. That's not the point of the blog, nor the aim of this post.

Rather, I think it's time to start fresh, and reignite some of the fire with which this blog began. And I think in order to do so, it's perhaps time to change directions slightly, and change focus slightly. While I still hope to report and comment on some of the more interesting, important, and news-worthy stories in the sports marketing and sponsorship world, that will no longer be the focus here. At least not on a day-to-day basis. Rather, I'd like to see BSM become much more of an open dialogue... even if it's very much a one way discussion.

How this will come to be, and what shape the blog will take moving forward, I don't really know. But after months of frustration, disenchantment, and a growing apathy towards the work I was doing outside of BSM, it was time for a change. Now it's a chance for a fresh start, an opportunity to rediscover why BSM started in the first place.

Halfpipe Dreams...

Anyone out there know the rules about logos and brand names on snowboards at the Olympics?

With all of the fury surrounding ambush marketing, and the measures the IOC have put in place over the years in an effort to protect their sponsors, one couldn't help but notice the subtle marketing in play during yesterday's men's halfpipe competition. The Olympics have rules regarding the allowable size of trademarks and corporate logos, regulations which have extended as far as forbidding Team Canada's use of its traditional Hockey Canada logo, and restricting the size and visibility of equipment manufacturers' marks.

So it seems strange, then, that every snowboarder to take the hill yesterday made no secret of their sponsors, with names like Burton and Bataleon seemingly underlying every descent.

In past Olympic Games, it has been commonplace for alpine skiers to remove a ski and show off their sponsor to the camera while awaiting their results. In televised competitions, this ritual emerged over the past twenty years as an accepted and almost celebrated part of skiing, based on the willingness of broadcasters to show off each skier's gear. This year, however, there's been much less attention on the skis at the finish line than would be expected. Either broadcasters and organizers are getting wise to the marketability of winter sports, or the skiing community is taking a stand against ambushing. Which seems more likely?

Finally, this post would be incomplete without giving mention to snowboarding's golden boy Shaun White, whose performance yesterday in the halfpipe competition drew a line under just how far this sport has come in recent years, and how big an impact he has had. Snowboarding, while a popular adventure and counter-culture sport for decades, is finally expanding into the mainstream, and the advances being achieved across the competitive arena are amazing. White's emergence and talent have been a driving force behind snowboarding's rise, and both he and the sport are now reaping the rewards.