Wall Street Journal, June 24, 2004
American Express Co., one of the world's biggest advertisers at sporting events, this year is the first new big-name sponsor at the Wimbledon tennis championships in more than a decade. But you'd hardly know it walking around the immaculately kept lawns at the site of the tournament.
At the grounds of the All England Lawn Tennis Club, the name of the New York-based credit- and charge-card company isn't plastered anywhere, not even courtside. In fact, American Express is only allowed to set up a concierge tent and to run small promotions for its card users.
Outside the grounds, AmEx has permission to host two promotional events: a barge outfitted with a grass court on the River Thames where it hopes tennis stars will show off their talents (it's still in the process of signing up players), and a big screen on London's Tower Bridge where it will show the games daily free of charge for several thousand fans.
And while AmEx can mention Wimbledon in its television ads, the commercials won't run during the tournament here because the championships are shown on advertising-free public television.
Wimbledon, which began this week and finishes on July 4, always has fostered an old-fashioned, elite image. Players stopped bowing to attending members of the British royal family only last year, and the club still enforces a dress code that requires players to wear predominantly white.
That attitude also extends to how the tournament treats sponsors and advertisers. Though it's one of the world's most prestigious sporting events, Wimbledon limits its sponsors to a handful of longtime backers deemed "integral to the game of tennis" such as Dunlop Slazenger Group Ltd, maker of the official tennis ball for more than 100 years; Montres Rolex SA, operator of the scoreboard; and International Business Machines Corp., which records serve speed. It mostly eschews big-name sponsors and sticks with English locals like the family-run Hugh Lowe Farms Ltd.
AmEx declined to disclose the fee it paid to Wimbledon. But IEG Inc., a Chicago tracker of sponsorship opportunities, estimates that it could be valued at between $1 million and $5 million.
"We've been approached by many consumer-goods companies, but we haven't wanted to proliferate the number of official suppliers too much," says Rob McCowen, marketing director for the All England Lawn Tennis Club. "Each one would seem less prestigious." AmEx was chosen as the tournament's official card because organizers thought the company's status as an international brand made it a good fit, Mr. McCowen says.
"Sure, we could plaster the courts tomorrow morning and make big bucks this year, but in the long term, television revenue might suffer," he adds. "We believe we get more TV revenue from the low-key, unbranded, uncommercial atmosphere. Our key objective is to maintain the quality and character of the tournament, not to maximize income."
The U.S. Open tennis tournament, which permits advertisers -- including AmEx -- to promote their names courtside, draws only slightly larger crowds than Wimbledon but earns about twice as much. Last year, the U.S. Open made $98 million in profit from ticket sales, sponsorships, and media rights on revenue of $127 million, of which $50 million came from sponsorships.
Wimbledon declines to disclose revenue or sponsorship figures, but says it had net income of £25.9 million ($47.4 million) last year. Wimbledon earns more than the U.S. Open from media rights because it has a larger international television audience. But it doesn't generate any money from U.K. TV advertising because it is broadcast by the British Broadcasting Corp., which is publicly funded and doesn't permit advertising. The U.S. Open's attendance last year over two weeks at Flushing Meadows in New York was 615,000 compared with Wimbledon's nearly 500,000.
Wimbledon could generate additional revenue of £50 million to £100 million by accepting additional sponsors, and that tally increases to more than £100 million if Wimbledon allowed courtside branding, says Christopher Carroll, senior vice president of GEM Group, a marketing, sports and entertainment consulting agency.
Others say, however, that Wimbledon's strategy is smarter in the long run by keeping with the tradition-bound nature of the event. Few others have tried a similar tack. The Masters Golf Tournament in Augusta, Ga., limited its sponsors for decades to maintain exclusivity. The tournament eliminated all sponsors the past two years -- in 2003 and this past April -- due to protests that it is played at a club that does not admit women.
Wimbledon "manages to get a lot from its sponsors without giving very much in return," says Alfredo Marcantonio, founder of the London-based advertising consulting firm MPH, who has worked at Omnicom Group and Interpublic Group. "You can only sell out once."
Officials at the All England Lawn Tennis Club aren't shy about enforcing their rules. Mr. McGowen says he recently rejected a large British supermarket chain's bid to be Wimbledon's official supplier of the strawberries that famously are served with cream in the afternoon. "That just struck us as too commercial," he says. The tournament gets its strawberries from Hugh Lowe Farms, a century-old, family-run farm in southern England.
AmEx says it's not bothered about its low profile at the event. The company is working its Wimbledon sponsorship into its advertising, says Nancy Smith, AmEx's vice president of global media and sponsorship marketing. It took ads, designed by WPP Group's Ogilvy & Mather, showing Andre Agassi picking up tennis balls on a court as well as toys in a child's room in a home that ran in the U.S. during the U.S. Open. AmEx substituted the name of the tournament in its slogan: "Long Live Dreams. Official Card of Wimbledon 2004."
The preceding article appears in the Thursday, June 24, 2004 issue of the Wall Street Journal in the Marketplace Section.