8 Business Of Yacht Raching Questions. Part 3.3 – Knut Frostad

The next in our series, questioning the leaders of the sport of sailing about how the business of yacht racing works and how it could change to compete against other professional games. CEO of the Volvo Ocean Race, Knut Frostad has some long term goals for the race and he also talks about who he sees as competition and what innovations have changed the game.

This interview was conducted at the 2010 World Yacht Racing Forum. Coming soon – Richard Worth from the America’s Cup Event Authority answers the 8 business of yacht racing questions. The responses are a real eye-opener!

It’s one thing to run a media infrastructure for a stadium based game, or a sailing event that happens within Wifi range of the shore. It’s quite another to deliver almost real-time, high definition coverage on multiple devices from the middle of the ocean. The Volvo Ocean Race has announced that the task of delivering the media goals for the next edition of the race will be given to Volvo IT who will be  the official IT supplier. Volvo IT will provide the IT platform, ensuring effective communications at each of the 10 cities, which the race will visit during the course of the event.

The company has provided similar services to the two previous Volvo Ocean Races and developed an understanding of what is required and capabilities to deploy a world-class IT infrastructure that can keep pace with the extreme nature of the Volvo Ocean Race.  With the need to communicate the race to stakeholders and fans in more than180 countries, the Volvo Ocean Race requires a supplier who has the ability to deliver at all times.

Volvo Ocean Race CEO, Knut Frostad said:

“Our IT solution requires a sophisticated infrastructure to run this world-class event. We are confident that Volvo IT has the proven ability to deliver at the highest level and we look forward to working with them on the upcoming race.”

Volvo IT, CEO Magnus Carlander added:

“We are proud, once again, to have the opportunity to deliver to the Volvo Ocean Race. The Volvo Ocean Race is one of the world’s most extreme, global sporting events and this is an exciting way for Volvo IT to showcase our ability to deliver IT solutions under extreme conditions and to leverage the passion and spirit of our committed team of employees around the globe.”

Volvo IT will design a platform that ensures network access and availability for the Volvo Ocean Race staff, media visiting the race, and participating teams. A key aspect will include running the media centres from an IT perspective at each stopover, enabling the transmission of gigabytes of data and providing hands-on, IT support. Volvo IT will also provide hardware and support for the Volvo Ocean Race headquarters in Alicante, Spain.

More Volvo Ocean Race News…

The Football World Cup Isn’t the Only Major Event In Town.

Yesterday, FIFA announced that the 2018 Football World Cup will be hosted by Qatar. Hosting the event is seen as being a way of generating tourism and other economic benefits as well as providing the catalyst to build infrastructure. While the UK , US and Australia spent large budgets to bid for the Cup, it was awarded to Qatar. Not all cities have the resources to bid for the World Cup or the Olympics, but the benefits delivered by major sporting events can be great, even if that event is on a smaller scale.

While the UK has been focussed on the Olympics and the World Cup, events like the Volvo Ocean Race have been wooed by countries and cities who aggressively want to use the platform of such a yacht race to grow cities like Alicante over the long term. Spain is one of those countries that believes in the power of sailing to build upon cultural traditions and create economic benefits. Valencia hosted a very successful America’s Cup in 2007, the Barcelona World Race is designed specifically to promote the city.

The Volvo Ocean Race begun in Alicante in 2008-2009 and the organisation of the race has also been moved from Southampton in the UK to Alicante as part of a long term partnership with between the event and the city.

But why is Alicante so convinced in the benefits of such a commercial sporting partnership. Vice President of the Generalitat Valenciana, Gerardo Camps has spoken to race organisers to discuss the motivations behind attracting and retaining such an event.

The Volvo Ocean Race will be based in Alicante for the next three editions. How do you think this city and the region of Valencia will benefit from the race, both in the short term and in the long term?

In the last edition, it was already proven that the departure of an international regatta with such wide scope as the Volvo Ocean Race from Alicante, benefited the citizens of Alicante and the whole Region; it manifested that the Region of Valencia is a region that is capable of organising global events successfully; and it promoted the city from September 2008 all throughout June 2009, the date when the fleet finally arrived in Saint Petersburg. The economic impact of the event stood at over 80 million Euros.

The fact that Alicante has been chosen as the Headquarters of the race organisation and that it will host the departure of the 2011, 2014 and 2017 editions will naturally increase the positive effects for the citizens.

How do you think the Volvo Ocean Race will help the economies of Alicante and the Generalitat Valenciana?

As with other events that the Council of the Generalitat Valenciana (Consell) supports and stimulates, the Volvo Ocean Race has become an economic motor that embraces several sectors: tourism, catering trade, transport, infrastructures and industry.

The great projects and events run by the Council of the Generalitat Valenciana (Consell), have received more than 64.3 million visits since they were set up, generating an economic impact of approximately 9,100 million Euros and have made possible the creation and presentation of 268,000 cumulative employments in the Region of Valencia.

And with regard to the Volvo Ocean Race, the development of the event does not require any expenditure for the Treasury, thanks to the participating sponsors that have been attracted by the tax exemption. The economic and social profitability of this celebration is unquestionable.

You have to remember that during the start of the 2008-09 Volvo Ocean Race, 1,500 direct and indirect jobs were created, the hotel nights in the city increased 15%, part of the port’s facade was remodelled, and docks 10, 12, 14 and the Old Maritime Station were accommodated. All of this led, as I said before, to an economic impact of 80 million Euros.

Apart from hosting the start of the Volvo Ocean Race, Alicante is also the headquarters of the organisation and that means, as the President of the Generalitat said last July during the inauguration of the permanent offices, that an international company has come to the Region of Valencia to put down roots and generate wealth and opportunities.

How will the GVA use the Volvo Ocean Race to promote the region?

The Generalitat Valenciana is aware that tourism is one of the big economic activities in our region, and in this way, the Volvo Ocean Race is a milestone that assures an excellent image campaign. The celebration of the race registered almost 2,000 million cumulative viewers and practically one million people visited Alicante during the 23 days of the Race Village.

Also, the Region of Valencia was present in different stopovers on the route like China, USA and Sweden, thanks to the program Start Region, in which it had its own slot. This meant that the diffused image of the Region of Valencia was not only linked to tourism, but it was also viewed as an ideal place to establish companies and businesses.

What did you think of the Alicante In-Port Race as a way for the local public to view the racing up close and personal?

The In-port Race is a magnificent idea so that the public can see the Volvo Open 70s spectacle from land. Once the race has started, for obvious reasons, we can only get images through the television; and that’s why the In-port race is a great opportunity to bring the event closer to the audience and promote the city of Alicante. Spending the day on the beach, while watching the toughest sailing boats on the planet compete on the horizon, is without a doubt a privilege for anybody from Alicante or visiting the city.

What did you think of the new Volvo Ocean Race headquarters in the Port of Alicante, when you officially opened it earlier this summer?

The Old Maritime Station has been transformed into a modern headquarters from where the race can be tracked in any part of the ocean and where the journalists, sailors, fans, guests and of course the staff, can be accommodated. Having this infrastructure, hosting three starts of the Volvo Ocean Race and being chosen as the headquarters of the organisation, contribute to making Alicante the world’s capital of sailing.

The Volvo Ocean Race, the teams and host cities involved have raised jointly over 210 million Euros in this economic climate. How do you think this will help the profile of the race and the city of Alicante?

We’re going through a nationwide and international economic crisis, and in these times, obtaining financing and private sponsors is complicated. But the Council of the Generalitat Valenciana (Consell) achieved it in the last edition, and is already looking to find sponsors that will again guarantee there will be no cost. The fact that the whole project has collected such an amount of money is a sign that the Volvo Ocean Race is the perfect platform for social, economic, touristic and sport promotion.

There will be an interactive museum next to the race headquarters in Alicante. How do you think this will help the local economy and excite the local public?

Alicante will have one of the few museums in the world that are dedicated exclusively to transoceanic sailing, with the hallmark of a legendary competition. Apart from all the economic and social benefits, we would like the Volvo Ocean Race to have an educational and cultural aspect. In this sense, the Interactive Museum, conceived and designed for fans, school groups, families and general public, contributes in the making of the Volvo Ocean Race as a global project.

Day 2 of the World Yacht Racing Forum will feature a session on “How are major cities and venues benefitting from hosting sailing events?”.

More Volvo Ocean Race News

Logistics is one partnership that you need to get right for any sport, especially an event that has multiple stopovers in multiple countries and continents. The Volvo Ocean Race has announced that DHL will be the  Official Logistics Partner for the upcoming yacht race which starts from Alicante, Spain.

It’s a good fit for DHL, who can show that they are able to manage complicated logistical projects and appeal to a wide audience of Volvo Ocean Race partners and those of the competing teams.

DHL will provide a complete logistics solution for the race encompassing air, sea and land freight movements. The company also sponsors Formula 1 and the Rugby World Cup.

With its expertise in such high-level events, DHL proves it is a global partner capable of delivering against extremely tight timelines and to disparate locations around the world. The Volvo Ocean Race demands a partner who can operate on a large and complex scale, and one which is able to deal with the intricacies of large sporting event logistics, where there are no second chances.

Volvo Ocean Race CEO, Knut Frostsad said:

“We are extremely pleased to announce DHL as our Official Logistics Partner. An event such as the Volvo Ocean Race requires its Logistics Partner to provide a world class service, and we look forward to working with DHL on what truly is a unique sporting and logistical challenge.”

Thomas George, CEO DHL Freight said:

“We look forward to supporting one of the most demanding international sporting events with our know-how in transport and logistics. It’s a perfect fit. Ocean racing requires core characteristics such as teamwork, passion, speed, technology and a can-do-spirit. These values also boost our performance at DHL.”

DHL will work with the race teams and partners to deliver key services including port-to-port transport of cargo and sailing equipment by air, sea and land. DHL will be responsible for the complete logistics management from the pick-up of cargo at any given venue to on-time delivery of the containers at the next race village. In addition to air, ocean and road transport services, DHL will provide full tracking and tracing of the cargo in transit as well as customs clearance and warehousing services.

More Volvo Ocean Race Sponsorship News…

Funding for professional yacht racing teams is a complicated business. Selling sponsorship and connecting with the right partners is tricky enough for one team in one event, but when that team is competing with different sponsors in different events it becomes even more interesting.

The CAMPER Volvo Ocean Race project is being managed by Team New Zealand, who have a clothing deal with Gill, but CAMPER have announced that the technical clothing supplier for the Volvo Ocean race will be Musto.

Musto are no stranger to the Volvo Ocean Race. The company partnered Flyer in the early beginnings of the Whitbread Round The Word Race. The brand has also worked with Fisher and Paykel, Yamaha, Merit Cup, ABN AMRO and Telefónica.

CAMPER / Emirates Team New Zealand Managing Director Grant Dalton commented:

“The Volvo Ocean Race is one of the most gruelling and challenging events in the world, and those sailors that compete will have to endure some of the most extreme conditions on the planet. Musto have always provided the most technologically advanced kit – the best in the world -which ensures our guys’ performance is never compromised. Personally, I have had great success in the past wearing Musto, so I am very pleased that we will be able to work together again on such an exciting project.”

With the Volvo Ocean race starting in Allicante and the CAMPER project having strong support in the Spainish market, the deal makes sense for Musto. The apparel brand has direct distribution in Spain and are looking to develop a presence throughout the country including own brand stores in places such as in Palma de Mallorca.

Musto Chief Executive, Nigel Musto, added:

“Musto is incredibly proud to have worked with the world’s best sailors through the years and that is testament to the quality of our technical products. Our partnership with Grant and the CAMPER team provides us with a fantastic platform to develop Musto as a leading technical sailing clothing brand in the Spanish market.”

More Volvo Ocean Race News…

The World Yacht Racing Forum, the only event for professionals in the sport of sailing will take place in Estoril in December. The 3rd edition of the event comes at a time when the industry is starting to take itself a bit more seriously, with global rights holders and event organisers competing for limited sponsorship dollars, but also a limited and ageing competitor base.

All professional sailing events are trying to position themselves as the premier competition. None of the ‘Grand Prix’ circuits can survive with 4-6 entries – the business model doesn’t add up. So the World Yacht Racing Forum is as much a promotional event as it is a discussion platform about the sport as a whole. In 2008, OC Events parked an Extreme 40 outside the Grimaldi Forum in Monaco and in 2009, the World Match Racing Tour treated delegates to lunch.

The Volvo Ocean Race has always supported the event and in 2010, that sponsorship will continue. Informa Yacht Group have announced the Volvo Ocean Race as Platinum Partner of the even in Portugal. Members of the Volvo Ocean Race management and operations team will attend the Forum including CEO Knut Frostad, and Director of Television Adam Binns, both of whom will be participating in panel sessions during the conference.

Volvo Ocean Race CEO Knut Frostad firmly believes the sport needs a platform such as the Forum to grow the value and appeal of the sport globally;

“The yachting industry needs more platforms to promote and share the growing sailing initiatives around the world. It is also important for us all to learn from each other and from other sports so we can increase the interest in sailing in general. This forum helps this process immensely and is a fantastic place to network.”

Event Director, James Pleasance said:

“The commercial world of yacht racing has developed significantly over the last few years. Today’s new media and television technology has also helped the sport find new audiences and that has brought with it new international sponsors and venues to the sport. The Forum is an ideal opportunity for these sponsors and venues to learn more about the benefits of investing in the sport. The Volvo Ocean Race is the best known global ocean race and we are delighted to have their support at the World Yacht Racing Forum and to share many of their own initiatives in growing the sport.”

MIRABAUD Sponsor World Yacht Racing Forum Photo Exhibition.

Financial services group MIRABAUD will once again sponsor the Yacht Racing Images Exhibition, launched at last year’s Forum in Monaco. MIRABAUD are also a Gold Partner of this year’s World Yacht Racing Forum.

The Exhibition will feature a selection of the very best yacht racing images taken throughout 2010 by an invited list of professional marine photographers including professional photographers Carlo Borlegnhi, Thierry Martinez, Daniel Forster, Rick Tomlinson, Kurt Arrigo, Onne van der Wal, Nico Martinez, Ian Roman, Franck Socha, Oskar Kihlborg, Gilles Martin-Raget , Loris Von Siebenthal, Juerg Kaufmann , Richard Page, Yvan Zedda, Guillaume Plisson , Benoit Stichelbaut, Kos Evans, Richard Walch, Franck Socha and Franco Pace. The images will be printed and framed by co-sponsor Canon, and displayed in the networking lounge area for the duration of the Forum.

MIRABAUD has been involved in international yacht racing for many years, notably through its sponsorship of the Bol d’Or Mirabaud, Thomas Jundt’s hydrofoil prototype, the Mirabaud LX, and the UK women’s Olympic sailing team, the «Yngling Girls », gold medal winners at the 2008 Beijing Olympic games! MIRABAUD is also Dominique Wavre’s main partner for the Barcelona World Race, the Transat Jacques Vabre 2011 and the Vendée Globe 2012-13.

Antonio Palma, Partner and CEO of Mirabaud said:

“Through these challenges and talented persons, we have shared our passion for human relations, technology and high performance, three themes that are particularly dear to us in the world of banking and finance. The Yacht Racing Images Exhibition 2010 is the visual expression of our passion. We look forward to seeing this exhibition and to be once again part of the World Yacht Racing Forum.”

Register for the World Yacht Racing Forum…

Ian Walker, Skipper of Abu Dhabi Ocean Racing talks about the progress of Abu Dhabi Ocean Racing’s campaign for the next Volvo Ocean Race.

A training base has been established at Abu Dhabi Marine Sports Club and construction of the boat is under way.

The Emirati crew selection process is drawing to a close. Over 50 application have been received so far. 12 potential crew will be selected for further sailing and physical tests to find the person who will contribute most to the team.

Business News updates for the Volvo Ocean Race

If you had the money, would you do the Volvo Ocean Race or the next America’s Cup? That’s the kind of question that brands with significant budget and an interest in yacht racing as a promotional platform have to consider when appraising the sailing sponsorship proposals that come over their desks each week.

Of course both events are different and in the end, sponsorship is about aligning individual promotional and communications goals with properties, audiences and markets, but that said – at a macro level, the two events are competing for the same sponsorship money.

While the America’s Cup has taken out a 100% mortgage on its brand equity and bet it on a new format, the Volvo Ocean Race has innovated in more gradual steps, backed by empirical real-world metrics about its audience, media value and return on investment. Brands like ABN AMRO, Ericsson, Telefonica, Puma and Volvo itself have enjoyed huge sponsorship returns in recent editions of the race and host ports are lining up to be a Volvo Ocean Race stopover.

With a year to go, CEO of the Volvo Ocean Race, Knut Frostad has taken the opportunity to give an update on the state of play.

VOLVO OCEAN RACE ENTRIES

We currently have six boats that are funded and ready for the next event, which is pretty much where we were at this time before the last race. It’s no secret that my ambition was to have more, but the economic downturn has hurt the international sponsor market. In that respect, I’m really pleased because we as an organiser, combined with the teams, have raised more than 210 million euros in commercial sponsorship and rights fees. Compared to any other sporting event in the last 18 months it is substantial.

At least five of the teams are potential winners. I don’t think we have ever had that many in the past. They are all building new boats, have top skippers and people with top experience of this race. It is going to be extremely difficult to pick a winner. There will be no team like Ericsson from the last race, running a two-boat testing programme for a year before the race.

There are four other teams that are very serious about taking part and then there is another group of five that are also working on it. We are focused on bringing more boats to the start line. If we achieve the same number as the last race (eight) then, it would be very, very good. My ambitions are higher than that but we have to be realistic. The market is incredibly tough, whereas for the last race it was possibly the best it had been.

We have clearly capped the cost of winning. You cannot spend 70 million Euros and gain an advantage anymore because you can’t two-boat test, you can’t build two new boats, you can’t make more than 15 sails before the race starts. All these different measures and many others will have a big impact. New teams and sponsors can see they have a better chance of winning the race.

VOLVO OCEAN RACE HOST PORTS

The bidding process for the stopover ports has been a great success and has been completed far sooner than in previous races. As such, there has been less organisational stress and most likely a better product. It’s great to have France back involved – it is a market we really wanted – and likewise for Abu Dhabi. Not only that, I think the sailing challenge is going to be fantastic.

The leg to Abu Dhabi will be an extension of the leg last race to Cochin in India and can only give the sailors more challenges, which is a good thing. And by breaking up the route to Brazil with Auckland will make a big difference. Now there is a full-on Southern Ocean leg. They will enter the Southern Ocean as a pack and it should make for close racing. That’s what we all want and I’m certain with a year to go that it’s what we’re going to get.

New: Dedicated Volvo Ocean Race News Page

The trend for sailing and yacht racing rights holders and promoters to hire commerical team members from outside of the sport continues with the announcement that the Volvo Ocean Race has appointed Iñigo Aznar as Head of Commercial Partnerships.

Aznar will join the commercial team which includes; Greg Miall – Commercial Director, Mike Marques – Head of Business Development and Sharon Tuff  - Head of Commercial Partnerships UK.

Iñigo believes that there is a lot of opportunity for the sport saying:

“The potential of this race is unexploited and we can really work on creating a successful sponsorship board. Companies look for a return on investment in media, an incredible business-to-business platform and substantial world image management. My goal is to provide these new experiences to our clients and to create new platforms for our consumers.”

Since 2004, Iñigo has developed commercial activities for Real Madrid, executing and commercialising sponsorship rights products, image rights of players and advertising platforms.

Earlier this year he decided to join the Volvo Ocean Race team to work in the Commercial Department at Race Headquarters in Alicante and decided that it was time to take advantage of his potential at an international level.

“It’s one of the most prestigious and global sporting events in the world and it can be even more. This challenge is amazing, we have the opportunity to do really great things and that’s what most persuaded me from the start.”

Iñigo comes from a background of football and basketball clients, but he is convinced that he can take the Volvo Ocean Race sponsorship to a new level.

More Volvo Ocean Race News…

Keen observers of the UAE will have noticed that the region is ultra-competitive when it comes to developing world class sports and tourism infrastructure. Take Etihad, Abu Dhabi’s Award winning airline, which only began flying in 2003. The emirate has the will and the resources to be a force in any endeavour they choose.

The Abu Dhabi Tourism Authority (ADTA) which is behind the emirate’s entry for the next Volvo Ocean Race has appointed Persico S.p.A. to build its Volvo 70 racing yacht for Abu Dhabi Ocean Racing.

Persico of Bergamo, Italy were the winners of a competitive tender exercise involving local and international suppliers from the UAE, Europe and the Far East.

Building of the boat has already started at Persico’s manufacturing facility in Northern Italy. The company is working with Farr Yacht Design who are responsible for the final design of the 70 foot racing yacht.

Abu Dhabi Ocean Racing expects to take delivery in June 2011.

HE Mubarak Al Muhairi, Director General, ADTA, which lead-manages the Abu Dhabi Ocean Racing team said:

‘This is becoming a truly international project. We are intent in tapping on the best minds and resources the yachting industry can offer to press forward our Volvo Ocean Race ambitions.’

With nearly 20 years experience manufacturing competitive sailing boats, Persico have been involved with a number of America’s Cup entrants from Moro di Venezia in 1992 up to Luna Rossa in 2007, which qualified for the event’s semi-finals. The company has also developed RC44 yachts for Russell Coutts.

Al Muhairi continues:

‘We believe Persico has the right credentials in terms of manufacturing experience, product innovation and its ability to deliver a highly competitive integrated build solution, so as to be a key enabler of our Volvo Ocean Race ambitions.’

Operations Manager, Mark Somerville, who has been involved with the manufacture of five Volvo Ocean Race yachts and 10 America’s Cup entries will oversee the build which will take approximately 45,000 man hours.

Ian Walker, Team Skipper said:

‘Over the next eight months, under ADTA’s supervision, the team will be involved in every step of the manufacturing process as we continually refine and enhance our Volvo Open 70. Getting it right can mean the difference between first and last.’

Abu Dhabi will also host a stopover of the Volvo Ocean Race. The emirate will be the first Middle East stopover in the ocean race’s 37-year history.

Al Muhari said about the 2012 Volvo Ocean Race stopover

‘We are determined to make our port stopover the best in race history and the race highlight as befits our three-pronged involvement. We are making Volvo Ocean Race history on three levels – we are the event’s first destination partner, the only Middle East organisation to enter the race, and the first Middle East host port.’

More Volvo Ocean Race Team News…