Wimbledon brand appears to be recession proof 17/06/2009 |
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If Wimbledon had any fears about how the global credit crunch would affect its finances, those worries were wiped out the moment 2,500 Centre Court debentures were snapped up last month for $43,830 each.
While Formula One, golf and soccer have all been hit by the financial downturn, a brand like Wimbledon is going from strength to strength.
"When we were having the discussions about the debenture issue, particularly with the timing of it, you would be pretty foolish if you weren't a little bit apprehensive about how it was going to work in the market," All England Club chief executive Ian Ritchie told Reuters in an interview in the run-up to the grasscourt grand slam which begins on Monday.
"But we were heavily over subscribed. We were very pleasantly delighted with the response. Here was a significant investment coming from a market place that has been in difficulty and yet the response was as positive as it was.
"If there was going to be a real impact for us in the recession, particularly the timing of the offering, it didn't manifest itself."
Despite the global economic downturn, each debenture released for 2011-2015 costs 4,600 pounds ($7,266) more than those issued in the previous five-year cycle.
With each debenture holder receiving one Centre Court ticket for every day of the two-week long championships, Ritchie defended the price hike.
"We felt it was right to put the price up because what was available was extremely attractive ... especially with guaranteed play on Centre Court with the new roof," he said.
"We got the pricing about right and clearly the market showed that by its response.
"You would be foolish if you said anybody was totally recession-proof but what has certainly been evident is that premium quality sports brands are still popular."
CHOOSY WIMBLEDON
Whereas many other sports are being forced to make cutbacks or seek new sponsors to survive the recession, Wimbledon has bucked the trend and has the luxury of being able to pick and choose the type of brands it wants to be associated with.
Like most sporting venues, the other three grand slam events have hoardings around their main courts crammed with the names of a multitude of products and companies, ensuring the sponsors get maximum exposure from the television coverage.
Wimbledon has always taken a minimalist approach. Brand placement is subtle, like Swiss watchmaker Rolex on its scoreboards, and adverts are kept to a minimum on the grounds.
The tournament organisers could generate millions more by selling advertising space around the All England Club but that would go against the whole ideal of the grasscourt major.
"We are very choosy if I can put it that way. The beauty of the way Wimbledon is structured with it being a private members' club that runs a global event ... so we look to optimise our income not to maximise our income," said Ritchie.
"So the most important thing for us is brand protection. We do not want to be involved with somebody simply to take the money if it doesn't fit absolutely with our brand and with our longer term objectives.
GORY DETAILS
"You look at the raft of people we've got as sponsors, a lot of these deals have been very long term. (Ball providers) Slazenger's been over 100 years, (soft drink firm) Robinsons' been over 75 years. Rolex is 30 years, IBM is 20 years. They and us see a long term value in this.
"Our general view is that we want global, world class brands. If they don't fit that criteria, we don't need to chase the money. We'd rather have a smaller number of larger deals with people than fill up a rota of every category you can find."
Wimbledon has never disclosed how much individual deals are worth, with Ritchie saying "we don't usually go into the gory details", but the one thing organisers are certain of is that their pockets are deep enough to ride out any failure of one or more of the tournament's sponsors.
"We have an operational profit and if we lost a raft of people then that income would come out of the operating line," said Ritchie.
"The larger chunk of our income is with broadcasters, and even in this difficult time we are in 180 countries and nobody is trying to renegotiate their terms with us for this year.
"That's because Wimbledon is such an important broadcast right for those people around the world, so it's not one of those things they want to downgrade in any way."
(Source: Reuters)
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