Business of Sport: Betting on a €12m catastrophe - how Punchestown covered Covid
REBOUND: The Punchestown festival
AS THE first stories emerged from Wuhan in the early New Year of 2020, Punchestown Racecourse took a punt on the pandemic.
In doing so it became the one and only Irish sports organisation to take out Covid-protection through event cancellation policies, before the true scale of the virus became evident.
For CEO Conor O’Neill insuring the festival for what turned out to be two years of oblivion saved the business millions of euro, and positioned the brand stronger than most throughout that time.
In an interview with The Pitch, O’Neill states that Punchestown Racecourse and a furniture firm were the only two businesses in the country to insure against such risk – shortly after the policy was drawn, such deals were removed by brokers.
“It didn’t necessarily solve every financial problem we had, many parts were unmanageable, but when we got into the loss adjustment phase, it’s fair to say we put up a strong argument,” he explained.
“Sometimes that’s just the way the ball bounces but we put ourselves in a decent position by being prudent, but also knowing we depend on one week every year for 85% of our annual business.” O’Neill will not have covered all of the racecourse’s revenue incomes, but with around €12m in turnover unrealised during the period, it came out with a healthier balance sheet than its peers across all sports.
He describes this year’s festival as “an opportunity to re-establish things, particularly as it’s the first major sports event since crowd restrictions were lifted – rugby and football matches aside”.
And all the signs are pointing to a hugely significant occasion, with perhaps up to 150,000 racing fans expected to converge on the Naas track in less than two weeks-time.
Last Friday, when compared to the same day in 2019 – a festival that saw 137,000 attendees – ticket sales were up by 82 per cent.
Organisers are still cautious with these numbers, given that culturally there may be some variation in buying habits of sports fans – advance purchases vs pre-pandemic walk ups – but no matter, the early forecasts are off the charts.
Another significant figure, and one of the most lucrative of all festival assets, are the confirmed sales of corporate packages – all sold out for the five days, with a couple of boxes still available for the opening Tuesday.
In all 20,000 clients will be indulged at the racecourse’s various VIP pavilions and suites, but in catering for so many high end guests - on the back of two years of inactivity - comes great risk.
A number of sources revealed that this year’s Cheltenham festival struggled to cope with the 40,000 corporate guests who attended the four days in March, where some basic services struggled.
Conor O’Neill says he is “constantly reiterating this message” to ensure there is no complacency about the challenge that lies ahead.
“This is an aspect that we need to deliver on – we have one week to make it pay and we have to take every precaution to do exactly that,” he explains.
*Punchestown Festival – The Great Comeback – takes place from April 26-30.
UP TO €50m in deals were agreed and signed by sponsors in the first quarter of 2022 - with the GAA owning one in two of all agreements signed.
Commercial contract exchanges across sports have surged in number by 58% on the first quarter of 2021, raising hopes that the sector can climb over the €200m mark for the year.
Transactions involving brands and GAA rights holders increased significantly, largely due to the freeing up of sleeve sponsorship space to investors, allowing for what will be a bumper year for Croke Park.
According to the results of the ‘Onside Quarterly Sponsorship Review – Q1, 2022’ rugby is once again trending high in the popularity stakes, with brands associated to the ‘Union’ occupying most attention with the Irish public.
Vodafone and Guinness are the two most popular brands in the public sentiment element of the report, with Lidl and its LGFA partnership in third place.
Women in sport are in exceptionally high demand, with nine out of every ten sponsors seeing female sports personalities as a “significant opportunity” for their marketing.
Kellie Harrington, Katie McCabe, Ellen Keane, Rachael Blackmore and Katie Taylor are now amongst the most sought-after personalities in sport – demonstrating the hard currency female athletes possess for big brands to communicate with their customers and public.
Overall the Irish sponsorship sector is dominated by sport, with eight out of every ten deals attributed to sporting assets and the rest going to the entertainment segment.
This year alone sports stars and teams will earn themselves and their rights holders up to €160m, but this number may be exceeded on the evidence of the frenzy of activity in the first quarter - up by 43% across all sponsorship.
According to John Trainor, CEO of Onside, quieter periods may come into play, particularly around Q3, but the signs are extremely positive for big numbers by the end of the year.
“It does look like the start of year forecasts are on track, if not potentially set to be exceeded,” explained Trainor.
“But we have seen a cooling off in deal volumes in previous years in H2 and a lot can depend on how Q3 deal volumes play out as to how the year end forecast materialises.
“But unless there is a sharp dip in Q3 market dynamics, the year is looking strong.” While it might be tempting to look at 2022 as the year of the bounce-back from Covid, the sponsorship sector has been particularly resilient with €180m in deals signed off last year, according to Onside’s figures.
With such strong numbers again this time around, it may just be a matter of two to three years before the sector enjoys transactions worth a quarter of a billion euro.
The findings are part of a wider investigation into the Onside Irish Sponsorship Industry Report which provides data gathered from the 113 most valuable sponsorship investors and rights holders.
SEAMUS Power will not be taking up a commercial partnership with Bank of Ireland, after both sides failed to align following preliminary discussions, prior to the Masters.
The Waterford golfer enjoyed a hugely creditable first visit to Augusta last weekend, finishing tied-27th alongside Jon Rahm and Viktor Hovland, picking up a cheque for more than $80k along the way.
Power is now expected to play at the USPGA and US Open in the coming months, with an invite to St Andrews for the 150th Open in July from the ‘Royal and Ancient’ on its way to Power’s US agency - Player Group Management (PGM).
Earlier this month Power’s agent – and a partner at PGM - Allen Hobbs had embarked on exploratory discussions with potential financial services partners in Ireland, including Bank of Ireland.
The Pitch understands that the conversation didn’t get past first base – not due to any great pricing difficulties - but more so with the bank’s satisfaction with its current golfing sponsor strategy, where all of its chips have been placed on Shane Lowry.
Lowry – whose latest contract was signed straight after his 2019 Open victory in Portrush – gave the brand extraordinary visibility across US and European television networks during a stunning performance at Augusta National.
‘Bank’s’ sleeve positioning is deemed more than sufficient, particularly within a sport which is not the focus of the firm’s strategic sponsorship priority.
Rugby is where the business is more at home, with sponsorship of all four provinces, but with Lowry its global visibility is gold standard – particularly after the Offaly man’s consistent battle for top places throughout the Masters’ weekend.
Seamus Power is in no rush to land a financial services partner, with an already impressive suite of sponsors in the bag, including Ping Golf (equipment), Power HRG (construction), Travis Mathew (apparel), Titleist (ball) and FootJoy (glove and shoe).
While neither Bank of Ireland or Seamus Power’s agent Allen Hobbs would comment on details of the discussions, it’s expected that further talks with a number of ‘Big Four’ firms are set to continue ahead of the upcoming majors.
