Selling
Why The WTA Doesn’t Want Another Title Sponsor
Tennis organization’s move raises the question of whether title deals can stymie efforts to sell other packages.
8/23/10: The reason most often given for the fact that major stadium naming rights and other title sponsorship opportunities are going unsold in the post-recession sponsorship market is that sponsors are taking a second look at whether they truly need to take such marquee sponsorship positions, many of which come with blockbuster price tags.
But in the case of one global sports organization—even though the above rationale was behind its title sponsor’s decision to abdicate its role and opt for a lesser position—it is the property’s choice not to put its soon-to-be open title slot back on the market.
In March, the Sony Ericsson WTA Tour and Sony Ericsson Mobile Communications AB announced a restructuring of their partnership that added two years to the deal that was scheduled to end after this year, but which saw the mobile device manufacturer step down from the title status it had taken beginning in 2005, and reduce its average annual fee by nearly 40 percent according to some reports.
Although cynical observers might believe the tour made a determination that it could not sell title rights for a decent price and is simply putting a positive spin on the situation, tour executives are adamant that not marketing title sponsorship is a deliberate, strategic move to boost marketability and revenue over the long term.
In the short term, the tour loses a six-year partnership that was to be worth a total of $88 million. Published reports say that while the tour earned its average fee of just under $15 million for the first five years, the last year of the agreement was nullified and Sony Ericsson will pay an average of $9 million a year from 2010 through 2012.
The tour will be able to re-market some inventory it receives back from Sony Ericsson, most notably naming rights to the season-ending championship tournament, currently held in Doha, Qatar.
But the tour also believes it can make its other sponsorship packages more attractive by “taking the brand back” and appealing to potential partners that don’t want to be affiliated with a title sponsor.
“No question, having a title sponsor was a challenge in terms of selling other sponsorships,” said Andrew Walker, the tour’s senior vice president of global marketing & communications.
“Many companies are interested in professional women’s tennis and the WTA because of our players, global footprint, tournaments, brand values and the demographics we can deliver, not the affiliation with other companies. There aren’t many companies that want to align with other companies as a result of a sports sponsorship.”
In support of that claim, Walker noted that although the tour has renewed several large partners since signing Sony Ericsson in 2005, it did not bring on any new sponsors between 2006 and June of this year.
Since the announcement that Sony Ericsson would relinquish its title status, the tour has signed two major first-time deals: a new partnership with Peak Sport Products Co. to be its official shoe and apparel sponsor in the Asia-Pacific region; and an agreement with Oriflame Cosmetics AB, a direct-sales beauty products company, to be the official cosmetics partner of the tour in Europe, the Middle East and Africa.
“We have signed two significant sponsors since renewing our partnership with Sony Ericsson,” Walker said. “Oriflame is the market leader in more than 30 countries, while Peak is the third-largest sports apparel company in China.”
The tour this year also renewed foreign exchange company Travelex Holdings Ltd. as official international payments provider.
For its part, Sony Ericsson opted to take a smaller role as lead global sponsor with the tour as a result of changing marketing priorities, Walker said. Although the company initially signed with the tour as a global brand-building platform, it now is putting more focus on social media and other digital marketing as its brand has become more established, he said.
“They made a very significant investment in the sport, and they have been a tremendous partner,” Walker said of Sony Ericsson. “We’re excited they will continue, albeit in slightly different capacity.” Sony Ericsson has provided the tour with significant marketing and promotional support over the last six years, he added.
Sponsorship sales for the WTA Tour are led by vice president of business development & strategy, Olivier Bremont, who is based in the organization’s London office and reports directly to chairman and CEO Stacey Allaster. Walker, who heads marketing and communications and is closely involved in working with tour sponsors, is based in the St. Petersburg, Fla. office.
Sources
Sony Ericsson WTA Tour, Tel: 44/20-7386-4100