As other luxury brands take a hit from the financial crunch, leading sports brands continue to rake in millions (see table).
Though fan loyalty is definitely a major contributor to the brands' financial resilience, their survival is also thanks to the growing sophistication of teams' marketing strategies.
Nathan Reddy, CEO of Johannesburg branding agency Grid, says sport brands have mastered the art of leveraging their supporters' allegiance by continuing to find innovative ways to monetise and merchandise their obsession with their clubs.
“Each brand, at the back of its mind, is a marketing ploy,” he says.
A prime example of a name that's transcended all traditional boundaries to transform and position itself as a global one is soccer club Manchester United. Sporting a Man U T-shirt has become both a fashion and an allegiance statement. The club has extended its brand influence in recent years to nontraditional platforms. It now owns a pay-TV channel (MUTV), a number of successful merchandise stores, and several branded restaurants and bars, including some outside the UK.
According to the world's first ranking of sports properties, conducted by British magazine SportsPro and published in July, Manchester United properties are worth an estimated US1,49bn. The American-owned European club is ranked eighth on the list of 200 sports brands. Rivals Arsenal and Liverpool, ranked 21st and 27th in the survey, are worth $910m and $801m.
Brands' popularity and influence are measured by their brand equity — that is, how they are perceived by the public, the goodwill and euphoria they generate, and their asset value.
When one looks at brands in general, Coca-Cola continues to lead, with brand equity of $66,6bn, followed by IBM and Microsoft at $59,03bn and $59bn. That's according to Interbrand Sampson's Best Global Brands for 2008.
Sportswear giants Nike and Adidas came in at numbers 29 and 70 (12,7bn and $5,1bn).
Ferrari is ranked only 93rd (3,5bn).
What makes a brand?
Richard Prevost, a director at Interbrand Sampson SA, says one of the ingredients of Manchester United's success, other than the team's performance on the field, has been the club's early recognition of what makes a brand.
“Of course part of their success has been that they win, and that's one thing [for which] a good brand [cannot be a substitute],” says Prevost.
“But one reason for Manchester United's success is that they understood before everyone else [in sport] that a brand is more than just the logo. They understood that it's not just the name, the heritage and the visual appeal, but also the culture, the location of the stadium and its look, the players and all touch [contact] points the brand has with fans. They were also the first [sports team] to have a brand manager.”
SA has done a lot to catch up with the trend. Looking at the Premier Soccer League, most of the teams now have brand managers who are achieving varying levels of success.
Fuelling the trend is sports sponsorship, which has become fiercely competitive in recent years as companies acknowledge the benefits of being associated with successful teams.
On the rugby front, the Springbok continues to be one of SA's most recognisable (and controversial) brands, in both respects because of its heritage.
The national team's emblem, which has survived several calls for its replacement, has undergone various makeovers since its inception in 1906, some of them — like the 1992-1996 and 2003 ones — being politically motivated. They reflect past suggestions to change the Boks' name to the Proteas.
It was also during this period that the hugely popular Sharks brand was launched. The KwaZulu Natal team was previously known as the Banana Boys. Sharks marketing manager Mike Ablett says the brand is constantly evolving, though the core will never change. “Our current campaign takes us back to our core ethos: ‘Black & white — nothing else matters'.”
In football, Orlando Pirates and arch rivals Kaizer Chiefs continue to be the most successful soccer clubs. Their brand equity has resulted in huge sponsorship deals.
It's noteworthy that Kaizer Chiefs was founded only in 1970. This was 36 and 23 years, respectively, after Orlando Pirates and Moroka Swallows, two of SA's oldest clubs.
One of the challenges sports brands face, especially the older ones, is finding the best ways to remain relevant without losing their identity. This was a challenge faced by KwaZulu Natal-based AmaZulu FC, established in 1932.
Praveen Inderpersadh, MD of Tequila, which did AmaZulu's rebranding, says one of the challenges the team faced was meeting its need for a brand reinvigoration to give it mass appeal, while also holding on to its strong Zulu roots.
To achieve this, Tequila gave AmaZulu's logo — a shield — a modern look and also kept its slogan “Usuthu — only the brave.”
This is because these aspects are fundamental to a team's identity, and therefore vital in maintaining fans' loyalty. Inderpersadh says club loyalty is something that's handed down from one generation of fans to the next, each of which identifies with those two elements.
For the sponsors, both existing and potential, image is everything. Says Prevost: “Nowadays brands compete for mind share. You have a split second to make an impression. It's very important to stand for something that is different from the other guy.” And sports brands have woken up to this.
The Financial Mail's attempts to get comment from Kaizer Chiefs, Orlando Pirates and the Blue Bulls were unsuccessful.
Source: Financial Mail
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