Sergi Vieta, a consultant with more than 20 years of experience in the sports industry and a professor at Johan Cruyff Institute, talks about how sports marketing agencies have adapted to the new reality and warns that “sport sponsorship is one of the sectors that will change the most as a result of Covid-19″.
Sergi Vieta has been a consultant to the sports industry for over 20 years, holding senior positions in marketing and media agencies, football properties, financial institutions and local organizing committees (LOCs). So, when it comes to engaging him in a conversation about the current state of sport and the challenges that lie ahead, the dialogue flows. He currently holds the position of director of the sports marketing agency Onside Sports Iberia and is one of the professors on our Master in Football Business in partnership with FC Barcelona. Sergi leads a team that analyzes, proposes and implements strategies so that their clients in the football ecosystem continue to generate business in a highly atypical year and warns that, in terms of marketing, “sport sponsorship is one of the sectors that will change the most as a result of Covid-19″.
Let’s start by talking about your current job in the football industry. How has the Covid pandemic affected sport marketing agencies?
It has affected them quite a lot, I would say. As sport marketing agencies, we support the different rights holders within the industry, which are media platforms, fans, rights holders and brands, and they all have been affected by Covid-19. Therefore, we need to try to find solutions to reduce as much as we can the dangerous and more adverse effects of Covid-19.
How have they had to reinvent themselves to help clubs engage with fans and to propose new ways to monetize and generate new revenues?
It’s very early to say that because it’s only 5-6 months since the outbreak of Covid started. In the big agencies—in the one I work for we have 1,500 people working—it’s not that easy to adapt to changes. But I have to say that digital has become the major part in the trends or development of the future of the industry because in the event of games or other events being held behind closed doors fans still need to have content, the clubs need the fans to be engaged with rights holders, and also brands need to increase their association with the rights holders for these closed-doors events or if there is no sports going on the planet. Therefore, digital content and digital platforms appear as the best solution in order to get all these players in the industry connected.
“Digital content and digital platforms appear as the best solution in order to get all players in the industry connected”
What does it mean for clubs to have to suspend their pre-season tours outside Europe? What is the main objective of the tours?
For the big clubs, I would say, because not all clubs go to Asia or US markets. A lot of supporters look for premium matches or events because they don’t have at their countries the best quality of competitions in their countries, and as far as we know, mainly in Asia, fans support very much players, not just clubs, and therefore what they need is to have the experience and, as we usually say in the industry, ‘touch’ the people. Because that is an experience for them and therefore, they are willing to pay good money, both the fans, brands, media and also the promoters, or local institutions, to bring these top clubs to play in these countries.
For the clubs themselves, there are also many objectives in going to these markets: one, which is very clear, is it’s another interesting source of revenue during pre-season. As I said, both in the US and Asia, particularly in China, they are ready to pay higher fees to come and watch these events than in Europe, where they play during nine months, it’s a more mature market and during the summer fans are more interested in going on holiday and having a break from football. The second objective is for marketing purposes. Clubs need to grow their international appeal, they need to reach fans all over the world, and that not only consists of having their games shown by local broadcasters during the season. Fans have an appetite for it and ask these clubs to be present in those markets to increase fan engagement as well as their relationship and interaction between the fans and the clubs.
“The pre-season tours outside Europe are basically driven by the club’s marketing department to achieve brand positioning and as a source of income”
China and the United States were the two main targets in the last years, two countries tremendously affected by Covid. Why did Europe stop being profitable? Will it return to be a safer destination?
Clubs are still playing games in Europe. Usually, the pre-season consists of two parts: one part is the summer tours, that is very much driven by the commercial department within the clubs with the focus on brand awareness, positioning and revenue streams; and a second part which is a more sporting pre-season, which is basically dedicated much more to the preparation of the team, physically, tactically, technically. And also, to teamwork because they have new players, which is led by the sporting division and they usually prefer to stay in Europe rather than go to these markets because of the hassle of the trips, and the pitches and conditions are not ideal to start the preparation. And instead of going on these international tours, they go to Europe, to summer camps in countries where the weather is mild, where they have superb training facilities, and they have other clubs at a similar level of preparation also looking for games.
The pre-season tours, among other things, have been part of LaLiga’s internationalization strategy. What has LaLiga done to become recognized as one of the best leagues in the world?
First of all, they have a very clear strategy that was drafted, revised and guided by president Tebas. From the beginning, they had a clear understanding of the future of the sports industry, and they thought that the Spanish market was a bit saturated, mature and they needed to go outside to increase the reach of LaLiga elsewhere in the world. So, they set an international strategy based on, first, increasing the value and the reach of the broadcasting of LaLiga matches worldwide, but that was also aligned with two additional pillars within the strategy. And second, to set up a network of offices, let’s say temporary offices, but they put different members of LaLiga in the houses of the main broadcaster partners of LaLiga worldwide. That improved the relationship with their domestic partners, but also allowed them to better understand the business models, and what fans were asking for, in order to improve the content given to broadcasters in each market. And the third pillar, which is very aligned to what football clubs do, is that we need not only to approach fans digitally or through media platforms but also to have more presence in those markets, physically. And the best wayt to do that is to bring to those markets our product, our premium assets, which are the football clubs, the players and competitive games.
“LaLiga has a very clear internationalization strategy based on increasing the value and scope of the broadcasting of its matches around the world and being physically present in the markets where they hold the TV rights”
Airlines, car brands and retail are three of the sectors that invest the most in sports sponsorship and have been among the most affected by the Covid crisis. Not to mention betting companies, whose advertising could be banned. Will we see a change in sponsorship strategies?
For sure. That’s one of the main changes that Covid-19 has brought to the industry. It’s true that some sectors with traditional and relevant investment in sport sponsorship are struggling and fighting against the economic crisis, but those sectors, eventually, are mainstream, they usually target male consumers, and therefore sports and football will still be one of their assets or prime properties to put their money into. It could be reduced for a few years, but they will come back stronger because in the end they need to capture this target market, which is massive. Betting is going to disappear, eventually, as happened in the past with tobacco and alcohol. Maybe it won’t be completely banned, but the new law will be much more restrictive and with much more limitation on advertising and betting in the sports industry. Therefore, the income for clubs from betting companies will decrease in the coming years, for sure. But there are opportunities in new sectors, which are growing after Covid-19 and also showing interest in sport sponsorship, and therefore we can balance between traditional sectors and newcomers. Sponsorship is key, clubs also need to understand how sponsorship is evolving because in the past sponsorships were very aligned to brand presence. But now, sponsorship is something else, and brands now are much more driven by income and success. So, rights holders and clubs need to understand what strategy is behind the brand in order to build up projects or products together to engage with fans and, at the same time, with clients. Digital is important, but also creative new concepts which will drive sales and revenues for the brands.
“Sponsorship is key and right holders and clubs need to understand what strategy is behind a brand to build projects or products together to engage with fans and, at the same time, with clients of that brand”
What role does technology play in this shift towards the new normality?
Technology has been part of the sports industry in recent years linked to data collection and big data. Also, to artificial intelligence in order to understand the consumers better and to help make marketing campaigns be more successful in terms of the selling or consuming process. And also, in the new ways of broadcasting events, and ways to increase the fan engagement in sport. The esports business comes from technology as well, and it is becoming a big trend in the sports industry and dragging a big chunk of fans to this discipline. Technology is inside the stadiums, for security and health reasons, and also in terms of describing the fan journey from their home to the stadium gates, etc. Technology is a must for most organizations that want to increase the value of their sport.
“Technology is a must for most organizations that want to increase the value of their sport”
How can young generations contribute to the football business?
We need to have them on board to better understand what the new generations want to consume, what their priorities are and how the industry has to create or adapt our product and content to fit their needs and requirements.
You are a professor in the Master in Footbal Business in partnership with FC Barcelona at Johan Cruyff Institute. Why do you think these kind of master degrees are necessary to professionalize the football industry?
The football industry is not a regular business, it’s very different. I always say to my students and colleagues that football is an industry that always depends on the results on the pitch on a weekly basis. That means that whatever you do in terms of strategy, business planning, internationalization, etc, you can never forget that as a football club you need to perform on the pitch. If you constantly succeed on the pitch, then you will be able to properly develop all the business around it. But if you don’t perform on the pitch on a regular basis, then it will be very hard for you to engage with fans globally.