The victory of Spain’s basketball team at the world championship in Japan September 3 can become the spark that reopens the old debate among marketing experts about whether quantity or quality matters most when it comes to media impact. The debate will also intensify talk about whether basketball can compete against soccer, the sport that is king throughout most of the world. Experts agree that sponsors must be very clear about their goals before they invest in one sport of the other. In addition, before they invest, sponsors should not forget such constant variables as the size of the market, the type of product, and the need for a well-defined market.
According to Ignacio Urrutia, a professor at IESE, each sport has its own unique value for investors, so each investor must be quite clear about his or her goals. Soccer fans are very different fans from basketball fans. “In basketball, sponsors such as San Miguel Beer are looking at the quality of the spectator.” For Urrutia, the main problem is whether the sponsor has a product with mass appeal – where quantity is the key – or a product targeted at an elite, which will prefer a quality product. Urrutia enumerates several factors that have an influence when it is time to choose where to invest: The size of the market, the type of product offered, and where the product is in its life cycle at the moment.
Eduardo Fernández-Cantelli, a professor of marketing at IE, agrees with Urrutia that companies need to have very clear goals so they do not make a mistake when they invest in a sport. “It depends on how much is known about the brand that you sponsor. If the brand is well known, obviously a sponsor should place its emphasis on quality. If the brand is known by a well-defined public, the sponsor should focus on quality.”
Clearly, basketball has managed to replace soccer in everyday conversation and on the front page of the sports section as a result of the Spanish team’s victory in the world basketball championship. For basketball fans, the Spanish victory in Japan did not come as a surprise “because we have been aware for a long time that our players are at the highest level,” explains a spokesperson for ACB, the Spanish basketball league.
The final game of the basketball championship, on September 3, attracted an audience of 3.63 million viewers and a 47.6% share of all viewers [in Spain]. In absolute terms, these figures may look poor in comparison with the audience that watched the Spanish team play at the recent World Cup in Germany. The quarter-final match, in which France eliminated Spain on June 27, attracted more viewers than any other program in the past four years – 12.2 million viewers and a 70% share of all screens. These figures show that a great deal of work remains to be done if basketball is to become as popular as soccer.
The enormous appeal of soccer makes sponsorship of the Spanish team even more valuable. The Spanish team that went to Germany was the fifth-most expensive team [for sponsors], after the United Kingdom, Germany, Italy and France. Its budget was about ten million euros, which included the cost of the qualifying matches for the event and the World Cup in Germany. The three main sponsors of RFEF, the Royal Spanish Federation of Football, were Toyota, Mahou (a Spanish brewery) and La Caixa, a banking institution. Three other major contributors were Digital +, Supermercados Plus (a supermarket chain) and Adidas.
The annual budget of the FEB, Spain’s basketball federation, is about 13 million euros and 79% of its funding comes from corporate sponsors, television broadcast rights, and from organizers of the championship. The FEB does not break down the percentage of revenues that it gets from its sponsors. However, sources close to the organization say that it could be more than 50% of its total revenues. If so, that means that the new sponsors of FEB — topped by the San Miguel brewing company, the Comunidad Valenciana (the tourism board of the government of the Valencia region) and Li-Ning, the sportswear company, collectively contribute about five million euros. That should provide an idea of the profitability of its investments in soccer compared with those in basketball.
The Spanish basketball team has had less impact than its soccer team. However, its victory, which was not expected by the great majority of people, has had a very positive impact on its image and on that of its sponsors, who have invested little but have managed to receive a high level of media exposure.
All of the experts agree that we will have to wait for quite some time before the impact of the victor can be quantified. “At best, a greater number of adolescents will decide to practice basketball, and they will feel happier about that sport. However, this segment of the market is clearly delineated and they won’t take any supporters away from football,” adds Kimio Kase, a professor of marketing at IESE. Fernandez-Cantelli says, “It is very early to predict how sports sponsorships are going to change, but I believe that there is not going to be a very meaningful change. Basketball cannot be compared with soccer. The great challenge for Spanish basketball is to find a place, which it did not have before. This important thing is that it must change direction, which includes having a clear idea about how to strengthen the ACB league.”
Pursuing a Coherent Strategy
What happens when failure is associated with a sponsored brand? Although there are some exceptions, “I have always believed that a drug scandal is also associated with the sponsoring brand; [not just with the player who takes drugs]. Later on, however, an article about [watchmaker] Festina, which sponsors cycling, made it clear that the company’s revenues had actually increased after the famous scandals,” said Urrutia. Kase advises sports sponsors, most of all, that there is no guarantee that their team will win. They should guide themselves by pursuing a coherent strategy, since the positive impact is cumulative. A decision taken now does not have any immediate effect. Investments will bear fruit in time.
Kase explains: “You have to develop a strategy within the [context of the] brand. A communications strategy involves sponsorships but it is combined [with other strategic initiatives]. You don’t have to invest in a team. If your brand is unknown, your first task must be to raise awareness of your products, so that spectators link your products with the sponsored brand.” For Fernandez-Cantelli, the most important thing is to define the goals you want to achieve as a sponsor. “If you are trying to create an association with your sponsorship, you could wind up suffering a negative impact.” He cites the example of Kobe Bryant, who was involved in the alleged rape of a 20-year old woman in a Colorado hotel in June 2003. The brands that had sponsored Bryant immediately broke their association with the basketball player. The investment they had made in Bryant was predicated on the fact that he was associated with positive values, not with attacks on minors. Nevertheless, Fernandez-Cantelli cites another scandal that wound up attracting new investors. “When the public saw photos of Kate Moss snorting cocaine, many brands tried to use that image to transmit such values as licentiousness and morbid curiosity. Normally, however, sponsors try to link up with a player or personality who is well known for his or her positive values.”
The Resurgence of Basketball
In the wake of the world championship in Japan, Spanish basketball may be able to enjoy a revival. The 1980s were a golden decade for the sport, but it later lost its appeal for advertisers and television broadcasters. The first beneficiaries of this revival will be the ACB league and its players. In addition to earning 90,000 euros for its victory in Japan, the Spanish team became heroes for young people and attracted the interest of celebrities. While it is very early to predict, says Fernandez-Cantelli, “obviously the victory is something very positive, even if it was not necessary. It is not an end but a means [to an end]. For the moment, it is clear is that the Spanish basketball team is not going to have any problems attracting an audience.”
He stresses that the players played the most important role in their victory. “Clearly, basketball has an opportunity, but if they don’t manage things properly, they are going to let it slip away, the way they did after the 1984 Los Angeles Olympics.” Spain won the silver medal then, “but they did not know how to capitalize on that success.” At the time, the people who ran basketball thought that they would always be in the same stratosphere as football. However, while football is an unstoppable planetary phenomenon, basketball “has to follow its own road, on which the impact will be cumulative,” explains Kase.
The Star Figure
The leading figure in this store has been Pau Gasol, the basketball player [from Catalonia]. The winner of numerous prizes, award nominations and much praise, Gasol is the player of the moment. All the acclaim that he has won from the public has enabled him and his team to become the latest champions of the basketball world. Gasol was the best player in the championship games, in which he finished as the third-hihgest scorer and second-highest rebounder, despite an injury in the second round that prevented him from playing in the final round.
Experts agree that Gasol has become a magnet for business and a media phenomenon because of his straightforward style. He is a star who put his career with the Memphis Grizzlies at risk in order to drive the Spanish team. In addition, Pau has opened a path into the NBA for his teammates and made them understand that they can win the basketball Olympics. However, can Gasol become a mass phenomenon, much like race car driver Fernando Alonso and tennis player Rafael Nadal? In his day, Michael Jordan had a watch with his name, along with cereals, a line of clothing, a car model, and a drink. Jordan also played a major role in several movies. This career path is a lot like the future that awaits Pau Gasol. Nevertheless, the experts say that it is too early to know exactly how much the Gasol cachet will grow. He has just initialed an agreement with Coca Cola, the first of many deals that are going to be offered to on him from now on.
For Kase, Pau can become another sort of phenomenon, the way Fernando Alonso remains. “However, to measure the extent of his influence, we’ll have to wait a bit more, since it is still very early.” According to Urrutia, Gasol’s way of thinking matches up neatly with his generation. The only thing left for us is to “to do more analysis of his brand and his identity.”
Fernandez-Cantelli also has no doubt that Gasol will have a positive impact on sponsors. However, he does not believe that his impact will approach the impact of Alonso. Ever since Alonso became the youngest champion in the history of Formula 1 racing, experts in automotive sponsorships have been predicting that his value would triple, expanding even beyond the seven million euros that Renault was paying him to as high a figure as 18 million euros. These numbers do not even take into account Alonso’s personal advertising contracts. His minimum fee for signing a contract last season was 500,000 euros, a figure that was already out of date when he won his world title.
“Basketball is a team sport, not an individual sport like Formula 1 and tennis. Although it may sound foolish, in our country it is very important for a star to have a physical presence [in Spain]. Alonso travels a great deal but his usual residence is in Spain. The problem is that fans [in Spain] cannot experience Pau Gasol on a day-to-day basis because he is in Memphis. As a result, I do not think this victory will have as much impact as Fernando Alonso’s victory.”