Scuttlebutt, the widely read online sailing newsletter has published a couple of pieces this week about the health of professional sailing. It’s obviously a topic close to our hearts… so for the readers of this place who don’t read Scuttlebutt (there can’t be many) here it is…
Taking a further look at the development of the professional sector of sailboat racing, Scott MacLeod, whose company Force 10 Marketing has owned and operated the World Match Racing Tour (WMRT) since 2003, shared his thoughts:
As for pro sailing, there are two areas in the sport for professionals to make a living: self-supporting commercial events and existing events within the sport that permit ISAF Group 3 (paid) crew. The question is: Can professional sailing be commercially viable without the support of a patron (billionaire, rich owner, etc)? Right now the answer is no for a number of reasons:
– Fragmented and confusing offering of opportunities to sponsors.
– The ROI doesn’t match with the costs or prices being asked.
– The ROI measurement isn’t’ real or the numbers are skewed.
– The governing body/ISAF provides no control over the structure.
As for self-supporting commercial events that do currently exist, I know the WMRT is in that category, and I think the iShares Cup is close but I don’t know how many of the boats are fully sponsored (commercially viable) or actually paid for by owners. This would all be moot if the America’s Cup had rolled on nicely out of Valencia as that event was a commercial home run.
There are a couple of issues in this piece that could run and run. We absolutely agree with Scott’s assessment as to why the sport of professional sailing doesn’t work so well. The sport has too many classes, too many promoters, too many small events competing for share of voice, interest and sponsorship. In some cases the ROI doesn’t match the valuation although many sponsors in sailing seem happy with their returns and there are some real bargains out there. ROI measurement is hideously expensive but wild assertions of TV reach are not confined to sailing. Finally, when you compare ISAF to governing bodies such as the FA or the ICB or IRB they don’t seem to be able to control the sport outside of the Olympic classes. Each one of these arguments could have it’s own feature, but today we wanted to focus on the question of ‘rich owners’.
Can professional sailing be commerically viable without the support of a patron (billionaire, rich owner)? Does it have to be?
Sailing is an expensive sport. This is not a game where all you need to play is a ball. So is the support of a patron or rich owner a bad thing? What is the difference between recieving funds from an individual versus a corporate sponsor? Perhaps it goes to the essence of what sponsorship is. Rich team owners exist in most high profile professional sports. Think of Ross Brawn (Brawn F1), the Steinbrenner Family (New York Yankees), Roman Abramovich (Chelsea FC), Dietrich Mateschitz (Red Bull anything…).
The difference with these sports and sailing is that the ownership of the team is an investment. It is the same as owning a block of apartments or a company. There may be some ego involved, but for the most part, the owners want to see a return on investment. They might spend big to get good players, they might dip into their own pockets to build a new stadium, but running a team is like running a business. To give you an idea, have a listen to Mark Cuban, owner of the Mavericks talking to Sports Business Radio.
Compare and contrast Mark Cuban’s thoughts with the behaviour of Ernesto Bertarelli or Larry Ellison, where you would have to say business is either taking a back seat or they are playing a very very long game.
So what’s the problem with rich owners in sailing? They skew the model. They make it look like there is a commercially viable business when in fact they are funding a hobby. In this sense, the self funding events have an advantage. They have to look at the numbers, they have to understand their market and product and stakeholders. They have to deliver on their objectives otherwise they fail. These are the ones that ‘Rich Owners’ should be investing in.