Yesterday what many already knew became official, that the Football Federation of Australia had lost another sponsor, Hyundai. New CEO James Johnson must be wondering what he walked into having only stepped into the role in January.
It is understood that negotiations to extend Hyundai’s 15 year partnership were underway prior to Johnston’s appointment. Hyundai chose not to renew the naming rights deal, which it has held since the league’s inception in 2005. The Korean car manufacturer will end its 15-year partnership with Australian football after this season’s delayed A-League grand final, if it takes place at all.
The Sydney Morning Herald reported a FFA spokesperson as saying “Football Federation Australia has enjoyed a great, whole of game partnership with Hyundai over the past 15 years. FFA remains in continued commercial discussions with the company regarding their long and significant commitment to the game from the grassroots to elite levels.” That may well be the case, but other sources claim that the presentation tabled was underwhelming. The FFA requested another opportunity to pitch, but were denied.
This will be a huge body blow for the FFA as finding another sponsor to step in as a naming rights sponsor will be hard. Hyundai, as they will have known when they became the inaugural sponsor of the A-League have become synonymous with the nation’s top football league.
It will take time for another brand to take over that position in the public consciousness. Savvy companies are aware of how long it takes for their brand to be linked to a team, a stadium and a competition, and how it will take years for an alternative company to step in and receive similar recognition. Examples of that are all around us. Arsenal and Emirates Stadium is a prime example. Emirates airline agreed to pay Arsenal UKL100million in 2004 for naming rights to their stadium which they moved into in 2006. The deal was for 15 years. In 2018 sponsorship on the team’s shirts and the naming rights of the stadium were extended to the end of the 2023-24 seasons and 2028 respectively.
If Emirates were to walk away after 2028, having had the ground known as the Emirates Stadium for 22 years it is going to be very hard for another brand to step in and have the same recall with Arsenal fans and also football fans in general. The FFA face a similar problem.
So strong is Hyundai’s brand in football and it’s linkwith the A-League it almost certainly rules out any other car manufacturer.
The other problem facing the commercial department will be the fact that other big brands have also walked away, and so rival companies will be watching that closely and wondering why. Many will be hesitant to move into the same space. They will be wary as to why their competitors withdrew.
German supermarket giant Aldi was the naming-rights sponsor of Australia’s junior football program, the Miniroos, but they chose not to renew when the contract expired in December 2019. Caltex did not renew its sponsorship of the Socceroos, and the NAB bank ended its long-term sponsorship of FFA and the A-League in 2019. Throw into the mix that broadcast partner Fox Sports looks to be ending its relationship too, the FFA needs to find some money from somewhere, and fast.
Maybe though the writing was on the wall with these companies before the FFA knew. One interesting aside to all of this is the tagline used by these various companies.
NAB’s is “More than Money,” maybe they felt that from an FFA point of view it was only about money? In August 2019 Hyundai launched a campaign with the tagline “Next Awaits.” The idea behind the branding Hyundai revealed “was born out of the idea that the company got to where it is today due to its willingness to take risks and lead where others follow.” Clearly they are looking to be a leader somewhere else. Maybe they were uninspired by the leadership in football?
Caltex came on board in 2016 just prior to the World Cup Finals in Russia in 2018. A year later in 2019 they opted not to renew their sponsorship deal. Maybe their tagline too was a case of the writing being on the wall, it is after all “Enjoy the Journey.” No doubt their executives enjoyed the journey to Russia for the World Cup!
Sponsorship is all about aligning your brand with another that aligns with your values, and compliments what your business is trying to achieve. Aldi’s tagline in Australia is “Good Different.” In other words you need to be good, and you need to be different. Maybe they felt that the FFA failed to have the difference that they were looking for, that the miniroos program failed to deliver in that space?
Looking at the FFA’s predicament one wonders if the problem lies in the fact that many of these sponsorship deals appear to have originated based on the relationship of Board Members with the various companies. Former NAB executive Joseph Healy and Caltex chief financial officer Simon Hepworth were both members on the FFA board. That Board has been led by Frank Lowy and then his son Steven, who are the owners of Westfield and we saw their company sponsor the Youth League, The W-League and the Matildas.
With such a strong link between the Chairman and his company sponsoring key assets there should have been full disclosure as to the value of this sponsorship, and how the deal was brokered, as there is a clear conflict of interest. Repeated requests by Not The Footy Show to the former CEO to disclose this were met with silence or that “the information was not available due to commercial confidentiality.” That would be fine in normal circumstances, but not when the Chairman of the board is the owner of the sponsoring company. The reason for requesting the disclosure, apart from being a governance issue, was that it has been alleged that the amount paid was well below the market value that such sponsorship should garner.
One key question is do those within the FFA know the value of their product? Football should no longer have this inferiority complex, it is the most played team sport in Australia, its national teams have a global presence and in the Matildas has one of the best teams in the World. If they do know the value of their product then do they have the right people bringing in this sponsorship based on the value of that product? Or is that sponsorship being brought in purely due to ‘relationships’?’
To add to the FFA’s woes Another sponsor may well also have to go soon. The FFA has Bet365 listed on its website as a sponsor. Its constitution reads that the FFA is “the Australian member of FIFA and comply with the Statutes and Regulations in force from time to time.” The FIFA code of ethics states that “Persons bound by this code shall not have any interests, either directly or indirectly (through or in conjunction with third parties), in entities, companies, organisations, etc. that promote, broker, arrange or conduct betting, gambling, lotteries or similar events or transactions connected with football matches and competitions.” Having held major positions in football such as Head of Professional Football at FIFA 2015-18 and Senior Manager Member Associations at FIFA 2014-15, the new CEO will be well aware that such a sponsorship is not allowed, and that the governing body should not be promoting such a company on its website. There certainly should not be a hyperlink to the betting company’s site! If the FFA is promoting betting, how can they suspend players caught betting on matches?
These are worrying times for football in Australia. Something is clearly not right if so many sponsors to be opting to walk away. They are clearly of the opinion that the product is not aligned to their values and they are not seeing a return on that investment. Therefore the game needs to work hard at changing the way it is perceived or the financial hurt could be extremely debilitating at all levels of the game.
