Long-Term Commercial Partnerships And International Federations – An Inevitable Match?
April 6, 2021
With the increasing trend towards sports properties securing long-term commercial partnerships, the Deloitte Sports Business Group have looked at what this means for International Federations and some key factors to take into account before entering into such a partnership.
Multiple sports properties including IFs have entered long-term commercial partnerships. These partnerships include traditional sports marketing agencies as well as private equity and other external investors.
Why should an International Federation consider a long-term commercial partnership?
There are some common themes around why IFs (and indeed other sports properties) have entered long-term commercial partnerships: Investment capital.
“A long-term commercial partnership provides an opportunity for external investment to enter the sport, and thus accelerate the development of these activities.”
IFs with ambitious strategies to develop and improve elements of the presentation of their sport (e.g. broadcast production quality, live event experience, digital offerings, merchandising, fan engagement) are unlikely to be able to implement all of their plans at once, particularly if they have limited cash reserves.
A long-term commercial partnership provides an opportunity for external investment to enter the sport, and thus accelerate the development of these activities.
People and network
In addition to investment capital, a longterm commercial partner can also provide access to people with the skills, experience and connections required to implement growth activities.
Examples of resources partners could bring include:
• An incentivised management team with the drive to accelerate growth;
• A strong network of people providing valuable connections; and
• Specific skills and expertise that the IF does not have in-house – this is
particularly the case in recent years in which digital initiatives have become a higher and rapidly evolving priority.
For example, the growth of direct-to-consumer opportunities (such as live-streaming through rights holder owned platforms and associated fan engagement through social media and mobile applications) are not historic “bread and butter” offerings for many IFs. A long-term commercial partnership with a partner that has strong digital capabilities including monetising digital assets could therefore be particularly attractive to IFs in this situation.
Who might the partner be and what commercial models are available?
There are a wide range of partnership types available to IFs and all can be
specifically tailored to create a bespoke deal to suit the IF and the third-party partner…
To view the full article via Deloitte’s PDF, please follow this link – https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/sports-business-group/deloitte-uk-long-term-commercial-partnerships-and-international-federations-an-inevitable-april2021.pdf
