The €142m split of ‘THREE’ Mobile from Chelsea marks a milestone in how splitting sports sponsorship can go horribly wrong.
A fundamental PR blunder amid a failure of rudimentary due diligence turned what should have been a morally open target into a disastrous seven days for the company.
If Robert Finnegan – the Irish CEO of Three’s UK&I business – had had his way, the company would probably never have taken over Chelsea.
This €47m deal with the board at Stamford Bridge was completed before the Waterford man walked through the door of the company’s Reading headquarters exactly two years ago.
For many observers, the partnership made little sense due to the exorbitant costs – Liverpool would have bought a shirt sponsorship for about the same money back then – a completely different brand.
The first year could not have gone better for ‘Three’ from a branding perspective as Chelsea clinched an unlikely Champions League title, then the European Super Cup and finally a Club World Cup title.
However, a bug-strewn week for the company’s sponsorship, marketing and communications teams has landed the brand in serious trouble, all because they went too hard and too quickly with an explanation.
Announcing that it was right to suspend its relationship with Chelsea should have been enough, but then demanding the immediate “removal of our brand of shirts” was an own goal.
Non-logo kits are specifically excluded in commercial soccer contracts where only branded jerseys need to be produced – outside of international soccer tournaments.
The Three sponsorship team should have told Robert Finnegan that the club’s entire season stock was planned and produced by Nike, complete with company logos.
Football kit stocks have been severely challenged in recent years and even Nike will struggle to produce and ship new kits in a matter of days, as we saw against Newcastle last Sunday.
One might also wonder why ‘Three’ hasn’t come out in the first place and announced they are terminating their deal with Chelsea with immediate effect and why all the hesitation and suspense?
That could well be due to money Three paid up front – Premier League clubs’ commercial deals require upfront payments – and the slim hopes the company has of getting some of that money back.
Suspension is not covered by “Force Majeure” – or force majeure contractual clauses – and reimbursement from such activations is never an option.
“Three” will know that when monies are due – and this is the big legal test – they are unlikely to see any of it as the club are no longer free to do business by UK government order.
Any new owner will also want nothing to do with legacy debt, particularly at a club the Johnson administration says has ties to Vladimir Putin.
A “Three” source told The Pitch “the company continues to monitor the situation closely” – as do millions of others.
Considerable debate followed RTÉ’s decision not to broadcast last Friday’s Shamrock Rovers vs Bohemians game, instead focusing on Wales vs France in the Guinness Six Nations Championship.
However, there should be no discussion of sports broadcasts where only one size matters. On February 25, a Shamrock Rovers game – this time away to Derry City – drew an average of 21,000 spectators.
The reason – apart from the traditionally small audience who were primarily interested in SSE Airtricity League games – was due to an U20 Six Nations rugby match between Ireland and Italy, which was broadcast on Virgin Media and watched by 140,000 viewers.
The market share of viewers who chose to watch the champions of Irish football away to Derry was just 2%, a figure so low that it cannot even be linked to commercial interests.
Much of last Friday’s debate sparked a question from broadcaster Ronan Mullen, who reasonably asked how a “non-Irish Six Nations game could be televised at the expense of Rovers vs Bohs”.
Mullen explained that for him “the ratings argument isn’t enough” and that the national interest should always trump “TV by numbers”.
Is Mullen right? Should the nation get one of the more exciting matches in the League of Ireland featuring the champions and their biggest rivals? Or is the national interest so disinterested that the (average) 300,000 viewers tuning in to rugby are a far more valuable audience?
In the world of broadcasting, numbers are the most important numbers for any station. Among the flurry of interactions on Twitter, one of the most interesting replies came from Fergus McCormack, a communications officer at RTÉ, who pointed out that it was a contractual obligation for RTÉ to show rugby before football on Friday nights.
“No Wales v France tonight (Friday) would mean no England v Ireland tomorrow. And I say that as someone who will be at Tallaght Stadium tonight,” he tweeted.
RTÉ cited comments from sports boss Declan McBennett, who was candid about television audiences in the recent past on the LOI Central podcast.
“I met the League of Ireland clubs at the Aviva Stadium in late 2018,” said McBennett. “I told them roughly, if your product gets over 100,000 views, then you’re a flyer. If it’s between 50,000 and 100,000, legitimate questions are being asked. And if it’s under 50,000 then quite frankly you’re in the drop zone because it’s a very, very competitive environment.”
Rugby and football were both ‘fliers’ over the weekend, with Wales registering a peak attendance of 364,000 fans against France, while Kerry registered a peak of 461,000 against Mayo in the Allianz National League. England v Ireland on Saturday was watched by a peak attendance of 1,008,000 spectators.
Of course, another solution for everyone would be if the FAI didn’t pick football’s biggest game of the year at the same time as a rare Friday night live broadcast of Six Nations.
THE people are back in record numbers and revenue will surpass previous totals. But are the players betting as much money on Cheltenham this week as they did at last year’s event behind closed doors?
Flutter Ent. tell that it expects more than 237 million euros to be invested by racegoers over the course of the week, a figure that would be below the 275 million euros it took in last year.
While punting from the sofa during the pandemic has happened without the distractions of bars and hospitality, 2021 has been a bonanza year for betting companies.
Flutter’s Paddy Power, Betfair and Sky Bet brands can still beat previous records, conservative guesswork is the name of the game for gambling companies and you can expect the same from the other big beasts.
Coral, Bet365, William Hill and Ladbrokes, along with the rest of a growing field, can expect to raise between €500m and €700m once the Gold Cup is played by around 3.50am on Friday.
Another area expecting great things tomorrow is airing and ITV Racing’s Ed Chamberlin told The Pitch he expects figures of up to 3m for the Gold Cup.
Chamberlin explained that ITV’s coverage is not only important for viewers at home, but also for the up to 30 sponsors on site throughout the week.
“I would have thought that five races broadcast every day would be so important and valuable to the Cheltenham Festival and its sponsors,” said the presenter.
ITV is believed to pay out up to €10m a year for its race coverage and a significant part of that will be invested in Cheltenham.
Tens of millions of euros are spent by sponsors investing in The Jockey Club, where they are overseen by its Director of Partnerships Carey Weeks.
Weeks believes commercial partners enjoy unique visibility through packed cases, with fans paying between €47 and €130 for the privilege.
Major sponsors paying big include high-end names like Boodles, Ballymore and Bentley to be a part of the spectacular racing.
Racegoers in the general enclosure areas have spent up to €20m for weekly access to racing’s biggest festival, where additional spending in the bars and restaurants is expected to exceed €10m.
The value of the Cheltenham Festival to the immediate area has been calculated at €120m in tourism impact – however this study was carried out six years ago.
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