Why respect for fundamental principles is essential for the sports business

Giles Morgan has become one of the most respected voices in sport marketing during a 25 year career which, until recently, included 12 years as head of global sponsorship at HSBC. Here, he makes the case for clear structures as a way of building certainty and prosperity in the sports industry.

Why respect for fundamental principles is essential for the sports business

During more than 25 years working in sports marketing, I have learned a number of important lessons. First among them is that to succeed you have to embrace innovation while respecting the fundamentals and traditions of sport.

We live in a time when the relationship between sport, media and consumers is going through a major revolution. There is more sport available to fans than ever before on traditional TV, online and through the powerful digital tech companies which are stepping into the market for sports rights. Then, of course, there’s social media to keep the sports conversation going 24/7.

But at the same time those fans have more competition for their attention than ever before. The entertainment universe is growing all the time and everything which applies to sport also applies to movies, music and other arts - in short, it’s a competitive environment and you have to be smart to hold on to and grow an audience. After all, the value to media companies and sponsors is engagement with fans.

Of course, sport has changed to make itself more attractive and to come to terms with changing commercial realities. The NFL does deals with social media companies, plays regular season games in London and moves franchises to new cities. But the basic infrastructure of competition doesn’t change.

In football, Uefa has regularly evolved its massively popular Champions League format to take account of changing demands from clubs, broadcasters and sponsors. But that hasn’t impacted negatively on the domestic leagues which feed it.

In tennis, time-starved fans can watch various ‘short’ versions of the game featuring some of its major stars but these competitions are not allowed to impinge on the great tournaments which give the game its global appeal.

That ability to embrace change while remaining true to core principals gives continuity, stability and confidence to fans - who understand what’s happening - to broadcasters who know they will get quality product, and to clubs and athletes who can plan with certainty. That in turn is good news for sponsors who have long-term programmes to plan and deliver.

So I was amazed to learn what is happening in one of the world’s great sports in Europe right under our noses. Here the top clubs in major markets play in their domestic leagues and in Euroleague, a competition where some teams are in it for life because of their standing in the game, others have licences for shorter periods or are winners of the subsidiary Euro Cup competition.

Now the issue here is that Euroleague sits outside the traditional sporting structure and appears to be in a state of near war with Fiba, the game’s international governing body.

Euroleague believes it is changing the sport for the better but by removing it from its roots and traditions it is creating a state of chaos which appears to be good for nobody.

For example, it is now January and, at the time of writing, Euroleague has not announced how many teams will compete next year, let alone who those teams will be. How does that uncertainty impact on broadcasters and sponsors, let alone the people who own and manage clubs and who can’t set likely budgets and commercial programmes in advance?

And because Euroleague is where the biggest money is - although it is peanuts compared to other major sports and the basketball big time of the USA - that’s where clubs focus. This has led many expert observers to worry about its impact on domestic leagues where unusual and unexpected results tend to suggest clubs which know they will automatically win a place in Euroleague, aren’t focusing on the everyday challenge back home. That seems to me to be short-changing fans, broadcasters and all other stakeholders.

Now I learn that some clubs want to walk away from their domestic regular season altogether and show up only for the play-offs for a shot at glory there or play a ‘B’ team in the domestic league. Is that something fans and media companies really want to see?

Then, of course, there’s the thorny issue of Euroleague clubs not agreeing to the release of players to play in Fiba World Cup qualifying games because they refused to work their schedule around Fiba’s already published competition calendar. That means fans don’t always get to see their top European-based players on home courts, which was the one of the key reasons for introducing the new system.

The entire messy business is a lesson on why it is important that sport sticks to structures which have served it well over the years. It’s quite simple, really: national federations look after the sport in their countries and domestic leagues feature the best domestic teams. Those who do well qualify for continental competitions with their places earned on the basis of how well they perform. National teams are vital to promoting the game and inspiring youngsters to play and become fans and should be given the space to flourish.

These are fundamental principles which the sports universe has been constructed upon.

They provide certainty and consistency for fans, teams, leagues, broadcasters and sponsors without ruling out innovation.

Brands and businesses need a significant degree of clarity and certainty of structure - rather than outcome - if they are going to invest in sport, and that’s something which those running the show would do well to remember.