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Ambush and Amateurism: How Rugby World Cup Sponsorship Began

The closer we get to the start of the 2015 Rugby World Cup, which Synergy is working on for four of the tournament’s sponsors and one of ITV’s broadcast sponsors, the more I’ve been reminded of the very different commercial background to the 1991 Rugby World Cup, the first time the RWC was staged in England, and the huge impact the tournament had on rugby and sports marketing in the UK. So, being (I suspect) one of a fairly small group of people to have worked on both RWC 1991 and 2015, here’s my take on the formative years of RWC sponsorship.

Ahead of RWC 2015, the eighth Rugby World Cup, we have a very good idea of what the tournament’s going to be like off the field – consumer behaviour, media coverage, brand activations, and so on. But ahead of the 1991 tournament, the Rugby World Cup was an unknown quantity for UK marketers.

It was by far the biggest sporting event to have been staged in the UK since the 1966 World Cup, so it was our first taste of a world event for merely twenty-five years.

The first Rugby World Cup, held in Australia and New Zealand in 1987, hadn’t really cut through here at all: rugby was a much smaller sport than it is now – pro rugby was still eight years away – and the Antipodean time-zone meant that pre-Sky, pre-satellite media coverage in the UK was after the fact, and light.

There were no meaningful sponsorship benchmarks: only a handful of companies had signed up to sponsor RWC 1987, almost all of them Japanese brands motivated solely by strong TV coverage of the tournament in Japan. One, KDD, paid more than the others and effectively became the tournament’s title sponsor. And as we shall see, in 1991 another Japanese brand repeated the trick.

A 1987 Rugby World Cup Final ticket. Note the KDD branding.

These were also evolutionary times for sports marketing in the UK. Although the industry was growing fast, the supply of opportunities was still limited, rights holders were old-school and commercially under-skilled (not least in rugby), and among brands, sports marketing was very much a minority activity.

The result of all that was that many of the operating principles we take for granted today just didn’t apply ahead of RWC 1991.

And the biggest difference was how RWC 1991 event and broadcast sponsorships were sold.

Today, it’s well-established practice for rights holders to sell their event sponsorships well in advance, and give their major sponsors a contractual first option to buy sponsorship of the event’s TV coverage. World Rugby been exemplary in this respect, and as a result one of the Worldwide Partners, Land Rover, has exercised their contractual option to become a co-sponsor of ITV’s RWC coverage. Similarly, our client SSE was only able to buy the other ITV broadcast sponsor position after the other RWC Worldwide Partners passed on the opportunity and it went to the open market.

All very orderly. But there was nothing like that in place for RWC 1991. Back then, the ITV broadcast sponsorship was open to all from the off, and taken to market at the same time as the event sponsorships. The broadcast sponsorship sold relatively quickly, whereas most of the event sponsorships were eventually sold at the last minute.

Compared to today, it was chaotic.

Two events above all led to this happening.

The first was the organising committee’s mysterious decision to award the tournament’s commercial rights lock, stock and barrel to a (now long-defunct) company called CPMA. This proved to be disastrous in many ways, not least in relation to sponsorship. CPMA priced each RWC event sponsorship at a deluded £2m, got knocked back by the market, and never recovered. Although Heinz (then run by former Irish rugby international Tony O’Reilly) signed up in 1990 for £1million, there were no other takers, and as a result CPMA inevitably became a price-taker reduced to doing last-minute deals: seven of the eight RWC 1991 event sponsors signed up in the six months prior to the tournament (I was on the buying side of two of these deals) for an average of around £300,000 each, including three in the last month.

The second was ITV’s coup in 1989 of winning the exclusive UK TV rights to RWC 1991, with a bid of £3million which the BBC could not, or would not, match: great business for ITV when you consider that the tournament was a big TV hit (over 13 million watched the England-Australia Final on ITV) and that this success paved the way for ITV to retain the rights to the RWC to this day. And even before the 1991 tournament started, ITV knew they were certain to make a profit when Sony bought the RWC broadcast sponsorship for £2million – two-thirds of what ITV paid for the rights.

This also turned out to be very good business for Sony, as David Pearson, Sony’s UK MD at the time, later recalled:

‘Various [Rugby World Cup] opportunities were presented to Sony including [being] one of eight named sponsors of the competition itself. However, what I felt was of much more interest was the opportunity to become the unique sponsor of the [ITV] broadcast rights…I decided to only sponsor the broadcasting and leave the event sponsorship to others…I believed that far more people would watch the matches on TV than in the stadia and I did not like the idea of sharing sponsorship with seven other parties. So it proved. The majority of people believed that Sony had actually been the event sponsor, giving rise to allegations by the official event sponsors that Sony had ambushed the competition. But that was false. We had chosen legitimately from the choices put to us by the agency representing the World Cup organisers and [ITV].’

I couldn’t agree more: Sony did nothing wrong. They took a brave decision on a new tournament and a new advertising format – paying, let’s not forget, far more than any of the event sponsors – and reaped the rewards. Ambush it may have been, but it was an officially-sanctioned and enabled ambush: the responsibility was wholly CPMA’s owing to their mismanagement of the commercial rights.

As to the ‘allegations by the official event sponsors’, my strong impression at the time was that most of this was driven by Heinz, who were particularly aggrieved: not only had they been undercut by CPMA’s fire-sale of the other event sponsorships, but they’d also seen the main benefit of being the first sponsor to sign up – the highest level of brand association with the tournament – blown away by Sony. (It’s perhaps not entirely coincidental that Heinz has eschewed major sponsorship ever since).

So all in all a painful lesson for the RWC, and a wake-up call for sports rights holders and brands everywhere about how sponsorships should be bought and sold around major events.

But I don’t want to leave you with a negative impression of RWC 1991 on or off the field: quite the opposite. The tournament was a huge success and left behind some very significant legacies.

It turbo-charged the UK sports marketing industry, accelerating its skills and giving it its first experience of activating the multi-sponsor major event model which was becoming the worldwide norm. Without that experience, for example, I have no doubt that five years later Euro 1996 would not have have been the huge success that it was off the field for sponsors in the UK.

But above all RWC 1991 was a watershed moment for rugby’s profile, which took off and never looked back. Quite simply, the tournament electrified the country. Everybody was talking about it, everybody was watching it, and especially in the week of the Final, it was everywhere – back pages, front pages and everything in between. It was glorious.

Here’s hoping for more of the same over the next couple of months. Good luck to everyone involved with RWC 2015.