Announcements by the New South Wales and Commonwealth Governments in November 2017 attracted a massive amount of media attention, and will also have a significant impact for sport.
On November 24, the New South Wales Government announced its decision to invest heavily into stadia infrastructure to ensure the State remained a major destination for Rugby League, football, rugby union and entertainment events. The reaction to this announcement amongst some media bordered on the hysterical – insanity, waste and largesse at the service of ‘Big Sport’.
On November 30, the Prime Minister announced the Terms of Reference for the Royal Commission into the Banks and Financial Services. Whilst only one aspect of a wide ranging enquiry, the Royal Commission will inquire into the use by any financial services entity of superannuation funds that do not meet community standards or would otherwise not be in the best interest of Members.
It appears that some MP’s are concerned about the use of superannuation funds to sponsor sporting teams and events.
As an administrator, the net effect of the terms of the Royal Commission and reaction to the Stadia announcement was a feeling there is a lack of understanding or appreciation of the benefits of investment in sporting infrastructure or professional sporting clubs. That some regard this investment as a ‘boondoggle’ or an illegitimate use of marketing and advertising budgets – that sports marketing is not as effective as print, radio, television, digital or outdoor advertising. That governments and companies do not receive an economic or social return on this investment, or that sporting and event infrastructure is not as important as transport, education or the arts.
This is wrong - and there are two recent examples to suggest otherwise.
The recently completed tennis grand slam event, The Australian Open, is a brilliant example of the success of government investment into sporting infrastructure. Attendees of The Australian Open experience a sensational tournament, in a modern facility that caters to the needs and desires of the fan and event partners.
Indeed, Tennis Australia Board President and Chair Jayne Hrdlicka was unequivocal in her comments at the presentation of the Women’s Singles Champion when she thanked the Victorian Government for its continued support and investment into the infrastructure of Melbourne Park, that this investment allows the Tournament to “do what it does” – present Melbourne, Victoria and Australia on an international stage as a vibrant, attractive and modern destination.
Given her outstanding career in a variety of sectors, including tourism, retail and technology, Hrdlicka’s understanding and appreciation for the benefits of government investment should carry substantial weight.
Major sporting and entertainment events provide undoubted return on investment, therefore the competition for them is fierce. Most State Governments have invested heavily to deliver outstanding infrastructure; AAMI Park, the Adelaide Oval and Optus Stadium in Perth to name a few; to continue holding these events in facilities that cater for the needs of fans and sponsors.
The NSW Government is right to invest now before the State falls behind its competition for major events, with the resulting damage to the economy. More importantly it will ensure the experience of attendees is equal to, or better than, those attending events throughout the rest of the country.
On private sector investment in sport, David Elia, CEO of Hostplus, described the benefits of sponsorship in an interview with The Australian on December 11. Elia told The Australian that Hostplus’s sponsorship of sporting teams and its marketing had helped expand its membership base, growing the fund and building scale to deliver extraordinary economies to members.
The fund was doubling in size every three to four years. As the fund of the hospitality, tourism, sports and recreation industry, Hostplus was marketing directly to its members working in pubs, clubs, hotels and stadia, and every demographic that attend sporting venues.
I believe sports sponsorship is a match for any of its competition in marketing and advertising. On any metric designed to measure marketing performance - cost per reach, cost per acquisition, willingness to consider or propensity to buy; sporting sponsorship is as legitimate and effective as print, radio, television, digital or outdoor advertising. Sponsorships also have the potential to reach beyond short-term sales to build a brand’s identity, contributing to sustained, long-term sales growth.
At the Rabbitohs, we benefit from corporate and government support for the club and its transformational community programs; and in turn deliver exceptional returns on this investment.
For example, our ‘home’ match played in Cairns each year delivers over $2 million in direct expenditure into the Cairns economy. An independent, Social Return on Investment evaluation of our Nanga Mai Marri program, which seeks to close the gaps in education and employment by supporting Indigenous youth in the South Sydney region and part funded by the Federal Government, determined that for every $1 invested in the program $3.26 in positive social impact is being achieved.
There is a robust and evidence-based case that private and public sector investment in sport works, delivering measurable economic and social return on investment.
We should be extremely confident in advocating that this investment delivers, countering the lack of understanding or appreciation of the benefits of investment in sporting infrastructure or professional sporting clubs.
* In the interests of transparency, the South Sydney Rabbitohs have a commercial partnership with Hostplus.