Sportfive eyes new client opportunities as sport counts cost of Covid-19
By Susan Lingeswaran
A widespread drop in revenue caused by the coronavirus pandemic may force major soccer clubs to adopt the German model of partnering with agencies rather than marketing their commercial rights in-house, a senior executive of Sportfive, the international sports marketing agency newly rebranded from Lagardère Sports, has told Sportcal.
Lagardère Sports Germany, which prior to September 2015 was known as Sportfive Germany, has built up a highly profitable business by marketing Bundesliga clubs’ commercial rights in a comprehensive model that involves an on-site agency team selling a signficantly wider portfolio.
That business has, on the whole, delivered strong financial results for the group and associated clubs, and with clubs looking to minimise their in-house costs in the current financially-challenging climate, Carl Woodman, managing director of UK and executive vice-president of sales for EMEA at Sportfive, believes it is a model ready to be rolled out more widely.
In a traditional season of European soccer, leagues across the continent would have already wrapped up their seasons and crowned their champions, but with the almost complete shutdown of sporting events worldwide for two months and the postponement of major events, many are still scrambling to finish as they look salvage at least some of their lost revenue.
The top leagues in Germany, Portugal, Poland and Austria are back underway, and while the majority of others will resume this month, some have canelled their seasons altogether, such as Belgium’s Pro League, resulting in a reported 25 per cent decrease in total revenues for its clubs.
Speaking to Sportcal from his home in Manchester, Woodman said: “The kind of comprehensive marketing model that we operate in Germany, and to a certain degree in France, has been around a long time in those territories but I think will be very difficult for many rights holders [clubs] now to support the same level of sales networking and infrastructure that an agency can invest in.
“I think with the situation right now, it will potentially make them realise that having invested in significant in-house resources, they will be feeling the downside to that at the moment where you have to continue to manage that cost base at a time when the revenue potential is down.
“So I think you might see a swing back towards agency models on the back of this.”
Sportfive is the official marketing partner for a number of German soccer sides, including Bundesliga’s Borussia Dortmund and Bayer Leverkusen, and 2. Bundesliga's Dynamo Dresden and HSV Hamburg, albeit last year Eintracht Frankfurt decided to end its 15-year association with the agency in favour of an in-house sales approach.
Sportfive also has partnerships with French Ligue 1 side Olympique Lyonnais and the English Premier League’s West Ham, althought not with an on-site team, and beyond club soccer, it is the official marketing partner of the English, Polish and Hungarian soccer associations.
Woodman said while the current situation would affect soccer sponsorships in the short-term, there would also be a chance for clubs to capitalise on value-based partnerships on the back of the crisis.
He explained: “Clearly in the short-term it’s been a very difficult time – there’s been significant disruption to the sporting calendar and to many industry sectors, so spend is down but once we emerge from it I think we might see a move towards value-based partnerships as people look to build on some of the sentiment that has come from this situation.
“The world has been through a time of crisis and may be what brands will want to connect with are stories of inspiration and unity and growth and I think that can lend itself to partnerships with sporting organisations.
“From a Sportfive point of view, we feel like we are in a good position when the world starts to return to normal. We have platforms like the Premier League, which provides unrivalled global coverage for international brands who want to communicate to the world that they are back in business and more domestically in the UK, the work that we do with the FA, with the men’s and women’s team particularly.
“There is a lot of feeling of national pride and togetherness, and I think there are a lot of opportunities for meaningful partnerships, value-based partnerships leading up to major events like the Euros, Olympics [in 2021] and Commonwealth Games in 2022.”
Last week, it was announced the Sportfive name had returned to the market almost five years after its disappearance after Lagardère Sports, the former sports unit of the French media giant, announced a rebrand following its takeover by H.I.G Europe, a division of the USA-based private equity and alternative assets investment firm.
The agency is now 75.1 per cent owned by H.I.G Europe, with Lagardère retaining a 24.9 per cent stake in the agency, which is valued at €110 million ($119 million).
It now describes itself as an international sports business and marketing agency with a network of over 1,200 local experts based in 15 countries, active in soccer, golf, esports, motorsports, handball, tennis, American football, basketball, ice hockey and multi-sports events.
Woodman, who was managing director at the original Sportfive UK agency, said: “Lagardere was a good owner but that ownership from my perspective had run its course – Lagardere were clearly switching their strategic focus onto two other divisions and we wanted and needed an owner to help us continue to grow and develop so we are really excited by having H.I.G in place that want to do that.
“Along with that there has been a degree of restructuring and a new leadership team albeit with a number of familiar faces. It’s an evolution rather than a revolution of the structure but definitely moving from being part of a large French public-listed company to the new corporate structure will allow us to be a little bit leaner and more agile and efficient in the way we do things.”
Ahead of the rebranding, the agency unveiled a new organisational setup focused on two main areas – domestic markets, and business development and growth.
The two areas are led globally by a Hamburg, Germany-based four-member executive committee comprising: chief executive Stephan Felsing, a former executive of the original Sportfive agency; chief operating officer Philipp Hasenbein; chief growth officer Robert Muller von Vultjus; and chief financial officer Christian Peters, who replaces outgoing Raphael Lombard.
The rest of the structure is broken down based on the main geographic areas where it operates.
The regions within the global leadership team are led by Joel Segal (president, Americas), Idriss Akki (president, Africa), Adrian Staiti (president, global sales and head of Asia-Pacific operations) and Hasenbein, who leads the Europe region.
Woodman was announced as the new executive vice-president of sales for EMEA and also retained his role as managing director UK – one of the agency’s three core markets in Europe, along with France, led by Laurent Moretti, former Lagardère Sports managing director, and Germany, whose team is expected to be announced in due course.
While the UK, Germany and France remain the three major hubs within Europe, Sportfive also has a number of developing businesses in the Netherlands, Poland, Hungary, Spain, Scandinavia and Spain.
Woodman said while there is no immediate desire for Sportfive to open offices in any specific new territories, it will be looking to grow its business in existing markets.
He said: “I think in China, there’s a huge opportunity to develop there. We’ve had an office there for the last few years that is continuing to grow and we are seeing the fruits of that now with bringing in revenue from Chinese brands into European sport, particularly European football.
“Our business in Asia was built for many years around the Asian Football Confederation but from now onwards the contract is not part of our business so we have been diversifying that business for a long time and the Asian sales force continues to bring brand across into Europe and its similar in the US.”
Lagardère Sports was tasked with selling commercial rights on behalf of the AFC from 2013 to 2020, but lost the contract for the 2021 to 2028 cycle to agency DDMC Fortis in 2018. (Another significant media rights and sponsorship contract with the Confederation of African Football was cancelled, both of which impacted the overall sale price.)
In Asia, Sportfive handles the broadcast and sponsorship rights to the Asean Football Championship until 2024, and recently renewed a deal with the World DanceSport Federation, the international governing body for all competitive dancing disciplines, to remain its media rights partner for the Asia-Pacific region.
In addition, its Chinese division in March brokered a sponsorship deal between Chinese tyre manufacturer RoadX Tyres and the Premier League's West Ham United.
Beyond markets it operates in, Sportfive will continue to invest in the sports it has been active in, with an increased focus on esports.
Woodman said: “Esports is now a sector for us which has grown from zero to being really significant in the last three years and that’s a key growth area for all of our territories now – UK, France, Germany, China, South-East Asia and the US.
“There is a huge amount of opportunity for that to grow.”
The agency first entered the esports market in 2017 by signing on to be the exclusive marketing partner of League of Legends team Unicorns of Love. Since then, it has expanded its presence in the market with a number of teams, including Germany’s SK Gaming and South Korea’s T1, and is the exclusive marketing agency for Riot Games’ popular League of Legends European Championship.
Woodman said Sportfive would also be looking to replicate partnerships similar to the one it has with the Commonwealth Games Federation.
In 2017, the CGF and Lagardère Sports established CFG Partnerships – a long-term joint venture to identify sustainable and long-term commercial partnerships that would help the delivery of future editions of the Commonwealth Games.
That first partnership was secured in March, a multi-games agreement with Swiss watch manufacturer Longines, which will cover the 2022, 2026 and 2030 Commonwealth Games.
At the time, CGF president David Grevemberg told Sportcal the agreement would be a catalyst for other long-term deals.
Woodman said: “Our long-term joint venture partnership with the Commonwealth Games Federation, the creation of CGF Partnerships is a really interesting model that shows how we can create long-term sustainable value for partners and our own business and I think we’re keen to explore those models where the opportunity exists.”
He added: “In terms of our development areas, we have a core within sports marketing rights and we definitely believe there is an opportunity to grow in that area – we have developed significantly and invested significantly in our global sales network and I would say the point of difference for us versus what any rights holder can sustain independently is the truly connected global sales force we have.
“Our partner marketing business, we see growth opportunities there across the key markets – that could be UK, France, Germany and the US particularly. We have a strong client base that we can continue to build on and with H.I.G and their ownership now and the opportunity for new investment, I think what we are looking at is innovative new business models that might allow us to develop new opportunities.”