Thursday, November 23, 2006

Sportfive sale shows strength of sports marketing

French media and defence conglomerate Lagardère has agreed to pay £584 million for Sportfive, a sports marketing agency which handles the television rights for Italy's Serie A in Europe, Spain's Primera Division in Asia and sells the rights to England's home internationals overseas. With football as its key focus, it has relationships with 250 clubs and media rights for international tournaments including Euro 2008 and the African Nations Cup. Lagardère described it as the "unchallenged market leader" although the big multi-sport agencies, Octagon and IMG, might not agree.

According to Owen Gibson in The Guardian, these agencies mushroomed in the 1990s as advisers and consultants to broadcasters, sponsors and rights holders. Meanwhile the burgeoning market for commercialising the image rights of bigname sportsmen and women, sparked in the 1960s when the late Mark McCormack launched IMG with Arnold Palmer, Gary Player and Jack Nicklaus, also reached new peaks. Tiger Woods, David Beckham, Ronaldo and Andre Agassi became global fiigures bigger than their sports. The big agencies branched out into content production and forged new advertising, hospitality and broadcasting arms as well as working more closely with rights holders and sporting bodies. Some became brokers in their own right, buying rights on a huge scale and reselling them.

"Sportfive acts as the classic middleman, either as an agent appointed by sporting bodies or using rights it has acquired itself, between rights owners and media organisations. It also has a burgeoning business representing individual club sides, taking complete control of marketing and sponsorship negotiations including stadium naming rights, shirt sponsorship and the increasingly important exploitation of a club's television and internet rights," Gibson wrote. "The price for Sportfive was driven up by intense competition. Sir Martin Sorrell's WPP advertising group was a serious bidder, and the French businessman Robert Louis-Dreyfuss plus a partnership of Bernard Arnault and Stéphane Courbit were also in the running."

Dominique D'Hinnin, Lagardère's chief financial officer, spelled out what Sportfive did for its clients. "They give them access to remote markets like Asia, they help them deal with new media platforms that are becoming increasingly difficult and complex to understand and they help small and medium-sized federations and clubs to access high-value deals," he said.

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