Globalising Australian Sport - Strategic approaches for Australian National Sporting Organisations and Professional Sports Clubs to compete ...
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Globalising
Australian Sport
Strategic approaches for Australian
National Sporting Organisations and
Professional Sports Clubs to compete
globally
July 2012
AUTHORS: Paul Diviny, Phil Noble PRACTICE AREA: Financial Services TOPIC AREA: Superannuation
www.spp.com.au
Globalising Australian
Sport
Australians love their sport, and Australia is Australian NSOs thinking of going global,
one of the most saturated professional can learn a lot from some prominent
sports markets in the world. With increasing examples of international leagues or clubs
pressure on Australian sporting that have successfully done just that.
organisations to grow revenue, international
There are two main strategies which have
expansion presents a potentially attractive
proven successful for international sports
proposition.
which have gone global:
Whether they realise it or not, Australian Firstly there are those who started with an
sports are already competing in a global already strong brand, and then leveraged
landscape. that on a global stage to create brand
Most sports played in Australia are played pilgrims.
internationally and are therefore already a Then there is a second group who started
part of a global competition for talent, with a smart model, or way of doing
audience and sponsorship. There are only a things, and made strategic investments
few truly indigenous Australian sports; most internationally and applied that same
notably Australian Rules Football. Even here, secret recipe.
the ability to transfer athletic talent has seen
Australian Rules footballers move to the NFL.
When it comes to competition for audience,
the rivalry is with all sports, international and Strategy International Examples
local, and other forms of entertainment. A: Create brand The NFL and
pilgrims. Manchester
The global nature of sport presents both Use the unique United have used
threats and opportunities for Australian brand, cultural, or their special
National Sporting Organisations (NSOs) and historical aspects cultural facets to
Clubs. of the original and sell their
authentic article to merchandise and
Threats: create global TV rights
Bigger leagues lure home-grown talent followers and keep worldwide
them coming back.
away from domestic competition (e.g.
Basketball, Golf, Football). B: Apply the secret Major League
recipe. Baseball and the
Offshore leagues take a share of the local
Leverage the City Football
sports entertainment audience (e.g. proven operating Group have
English Premier League, NBA). model to create leveraged their
Opportunities: success in foreign experience in
markets running leagues
Far bigger audiences offshore can be and clubs, and
tapped into investment in
Bigger sponsorship deals are possible technology &
systems to
when the audience is multi-national
expand their
Less lucrative competitions elsewhere influence to other
can be viewed as talent pools to be drawn clubs globally
from to improve the quality of the local
product.
November 2014 © SPP 2
Organisations who create
brand pilgrims
Selling the NFL along with Manchester United has a
it’s intrinsically American unique history and this
feel has allowed it to reach has fostered a huge and
210m fans worldwide. loyal following which
The NFL launched an ambitious underpins the financial
international push in 1991 by creating a success of the business.
European league complete with European Manchester United has one of the most
clubs and players, new stadiums, loyal fan bases of any club. The tragic
infrastructure and a gargantuan 1958 Munich air disaster which claimed
marketing budget. the lives of 23 of its players and officials
After early success with audience created a strong emotional bond between
numbers, things turned sour; diving the club and its fans which has left a
ratings and plunging game attendances lasting legacy.
resulted in losses of around $7m per In addition, United built a formidable on-
season and the league finally closed in field record from the early 1990s, winning
2007 after 15 lossmaking years. 13 of the last 22 Premier League Titles.
The NFL’s failure in Europe was a painful On the back of this, they implemented an
lesson for the organisation. Apart from not aggressive commercialisation strategy
having European talent to work with, the selling the Manchester United brand,
customers didn’t want a replica, they including Red Cafe's in Asia and many
craved the real thing – American accents, regional sponsorship deals. Purchasing
Astro-turf, oversized foam hands, tailgate merchandise allows customers to feel part
parties and the Super Bowl. of this unique family which has driven
In other words, what people coveted was international sales to record levels.
bite sized chunks of American culture for Recognising that pilgrimage is not
consumption, embodied in the original possible for all fans, regular international
authentic product. tours are held in the off-season to
After the failure of the European league, promote the brand and team.
the NFL switched to creating brand
pilgrims by promoting TV rights and
merchandise of their home competition in
international markets. The NFL still
actively grows the audience in Europe What these organisations
through promoting the NFL International have in common, is that they
Series played at Wembley Stadium.
Importantly, this isn’t an imitation product recognised their strengths
but three rounds of the regular NFL and played to them.
season.
November 2014 © SPP 3Organisations who apply
their secret recipe
Major League Baseball, with 145 years By developing its talent, off-field people,
of managing professional team sport, processes and its infrastructure, the City
have learnt a thing or two about how to Football Group improved Manchester
run a league. City’s on-field performance leading to
increased loyalty and fan numbers.
Using their knowledge and experience, MLB
have been successful in supporting
baseball’s expansion in Japan, Korea,
Europe, Central and South America, the The meteoric rise of Manchester City’s on-
Caribbean and Australia. Their strategy field success, including two Premier
differed however from the NFL’s Europe League titles in the last three years, has
experiment as the new leagues were been credited to the wide sweeping
intentionally localised using MLB technology changes made after its purchase in 2008
and knowledge, rather than MLB culture and by the City Football Group, owned by a
values. member of the Abu Dhabi Royal Family.
Huge amounts were spent on acquiring
Baseball has long been a leader in sports
international class players, but also on
innovation, and this capability to look
developing a sustainable model for
beyond what is done today is a strength that
success including a training campus to
it can continue to leverage.
nurture young talent, and professional
Introducing portable food and drinks to standards of organisation management.
the audience - the now ubiquitous hot dog
Part of Manchester City’s model for
salesman was born at Yankee Stadium in
international expansion relies on making
the 1920s.
strategic investments in international
Installation of lights in stadiums, allowing clubs and applying their sophisticated
games to be played at night increasing junior development, R&D, sports science,
attendance by a factor of between two coaching and training systems to improve
and three. the club’s performance.
Use of electric scoreboards, to improve Investments to date include Melbourne
audience attention and engagement. City FC (renamed from Melbourne Heart
Meticulous recording and publication of FC) and New York City FC. Both
game statistics to tap into a niche market investments have been completed in
of sports fans. partnership with local sports clubs,
Use of sabermetrics – sophisticated Melbourne Storm and the New York
statistical analysis of player/club Yankees. Elements of the Manchester City
performance (aka Moneyball) to improve branding such as the colours and global
management and predict outcomes. This sponsors are blended with artefacts of the
has been taken up in cricket, soccer, AFL local city and/or club such as the crest in
and golf amongst others. designing the club badge.
November 2014 © SPP 4Australian sporting
organisations have also
used the pilgrims strategy
to win
The VRC successfully sold the Melbourne Tennis Australia leveraged the scorching
Cup to an international audience. Australian summer to defend the Australian
Open’s status as a grand slam.
The Victorian Racing Club (VRC), holder of
the Melbourne Cup, employed a pioneering Tennis Australia is another example of an
strategy to elevate the race with a rich Australian national sporting organisation
history to new heights. The VRC did this by that has recognised the value of their
exposing the event to an already deep talent unique event (the Australian Open), and
pool and associated fan base in the UK, successfully defended its status on the
France and Japan. The VRC successfully international stage.
lured these horses by offering larger prize- There was a time, when the Australian
money than these horses would usually Open’s status as a grand slam was
compete for, and actively broke down the considered to be in jeopardy.
considerable barriers to moving horses However, by learning from Wimbledon’s
across the globe. technique of accentuating the English
Today, the Melbourne Cup is watched by nature of their event, the organisers
over 700 million people worldwide making it realised that they could leverage the
one of the most attractive sponsorship Australian summertime culture to increase
propositions in Australian sport. The current the Open’s attractiveness.
major sponsor, Emirates Airlines, has signed Just like the NFL, the event showcased
a five year deal which contributes to the Australian summer culture to northern
$6.2m per year prize-money. hemisphere viewers looking for an escape
from winter.
More recently, Tennis Australia has
focussed on treating players and support
staff like royalty in order to keep them
coming back, rather than spending their off
season at home.
The most successful sports Tennis Australia has also carefully invested
and clubs understand their in facilities and constructed feeder
tournaments to maximise the success of
weaknesses as well as their the Open as well as extending the Australian
strengths and apply a tennis season from December to late
strategy which leverages the January.
best of their organisation
November 2014 © SPP 5The challenge facing
Australian NSOs
Not all Australian NSOs are positioned quite In fact, many of the world’s biggest sports
as well as the VRC or Tennis Australia, with were once created in exactly this fashion.
strong brands and deep history. For example, just about every successful
For the lucky few, reflecting on core strengths form of motor sport was once a niche player.
and considering creating brand pilgrims or Rugby League split away from Rugby Union
leveraging a secret recipe will help to develop over a hundred years ago, and the two have
an international strategy that works. competed in some way ever since. A niche
form of the sport, Rugby Sevens is set to
For sports that don’t have a strong starting
become an Olympic event in 2016.
position, the key question becomes how to
cement a sustainable place in the global Cricket has gone through two cycles of
ecosystem? successful niche attack in the form of the 1
day game, and more recently Twenty20.
Two options for consideration include: If Australian NSOs aren’t thinking about
1. Becoming a feeder league for more their international strategy, they should be.
established competitions.
This might include exporting the best talent, Whether the goal is global domination,
but also working hard to bring them home, survival, improving the talent base or simply
when possible, to promote the sport or capturing a larger portion of the audience
represent the nation. pie, sports need to be thinking about how
Association Football is a great example of how they actively fit into the global landscape.
a sport can achieve success in Australia
without being a part of the largest There are a range of options available, and
international leagues. With huge grass-roots choosing which one is most likely to
participation numbers as well as producing succeed is a tough assignment. Tougher
world class players, Australia has a prolific still, is having the conviction to play out a
talent pool that punches well above its weight bold strategy that reshapes the game as it is
globally. As the local league has today.
strengthened, it has become more However, one thing that will be true of the
competitive and made significant inroads to right strategy is that it recognises and
the Asian market, boosted by Western Sydney encapsulates the particular strengths and
Wanderers winning the AFC Champions positioning of the sport within the
League and hosting the Asian Cup in 2015. international landscape.
2. Establishing a niche support base that
can be grown globally.
Changing the duration of the game, bringing
an outdoor sport indoors or changing the
rules in a radical fashion have all been used
effectively before to grow appeal to a broader
audience.
November 2014 © SPP 6About SPP About the authors
Strategic Project Partners is a
generalist, strategy consulting David Mackay
firm. Associate Director
We support General Managers
on difficult strategic and
operational challenges. David leads SPP’s work in the Sports, Media and
Entertainment sector, providing advice to National
Established in 2005, SPP has Sporting Organisations, sports clubs and entertainment
delivered successful outcomes providers with a specific focus on creating sustainable
for a broad range of models for commercial success. David assists
commercial and Government organisations in developing and realising business
sector clients. growth and operational strategies from early stage new
ventures to major corporations. David is a passionate
As a result, we have strong football fan and keen runner.
relationships with many
businesses, from Top 50 listed
companies through to small
enterprises. Nick Scarborough
When we deliver our projects, Senior Consultant
whether it’s a strategic study or
the implementation of large-
scale change, we focus on:
Strong project management Nick built and ran his own online retail business. More
Clarity of outcome recently, he has established experience developing
An obsessive focus on strategies for clients across many sectors. Transferring
best practices across industries has been a key source
project benefits
of value that Nick has brought to clients. Nick is
Robust, fact based analysis passionate about evolving sport through innovation,
Simple communication and also loves golf and thoroughbred racing.
Bringing experience to bear
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Contact us
Strategic Project Partners
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David Mackay eImpact
m 0407 483 951
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November 2014 © SPP 7You can also read
