Sail of the century
While the crowds cheered Britain's record-breaking sailor in Falmouth yesterday, her sponsors were indulging in a quiet moment of celebration. Cahal Milmo reports on a very substantial DIY deal
Cahal Milmo is the chief reporter of The Independent and has been with the paper since 2000. He was born in London and previously worked at the Press Association news agency. He has reported on assignment at home and abroad, including Rwanda, Sudan and Burkina Faso, the phone hacking scandal and the London Olympics. In his spare time he is a keen runner and cyclist, and keeps an allotment.
Wednesday 09 February 2005
What was in it for a company whose portfolio at the time ranged from Superdrug to Woolworths? Why should they put money into a sport Edward Heath memorably likened to "standing under a shower tearing up pounds 5 notes"?
The answer arrived shortly after 11am in Falmouth Harbour yesterday when Dame Ellen stepped off her trimaran, catchily named B&Q/Castorama, in a blizzard of ticker tape bearing the corporate colours of her two key sponsors.
In so doing, she earned Kingfisher's two flagship brands, B&Q and the French DIY chain Castorama, an estimated pounds 2m in free advertising from one single morning of saturation television coverage in Britain alone. Media buyers yesterday reckoned B&Q and its stablemate have enjoyed global publicity in print and airtime worth pounds 75m in the past four days alone. The final total for Dame Ellen's 71-day voyage is likely to exceed pounds 100m, a figure which excludes the benefit to B&Q of what experts refer to as the "cool human" factor of being inextricably linked with a sporting hero.
It is not a bad return for an investment by two DIY chains more associated with creosote than crossing oceans. They paid out little more than pounds 3m; that is pounds 1.2m for the cost of building the B&Q/Castorama trimaran, plus pounds 2m in support costs.
Unsurprisingly, Kingfisher and its two DIY subsidiaries were yesterday reluctant to be seen publicly rubbing their hands with glee at their publicity coup, preferring instead to play the role of proud patrons. As a spokeswoman for B&Q put it: "Of course there is a benefit for us in terms of fantastic coverage. But that is only possible because of Ellen and what she has achieved. We are a partnership."
But just as the company ensured maximum exposure for its brands by putting the names and logos of B&Q and Castorama on alternate sides of the 75ft trimaran, so there are two sides to this tale of corporate magnanimity. Future sailing histories will insist it was the determination and enthusiasm of Dame Ellen which persuaded Kingfisher's executives to provide the money that started her yachting career at that meeting in 1998. The conglomerate, at the time itself largely unknown as a household name despite owning brands such as Comet and B&Q, agreed to pay the pounds 50,000 to build Kingfisher I, the boat in which Ellen MacArthur eventually secured fifth place in the Route du Rhum.
This achievement secured her the admiration and adulation of millions; not in her native Britain, but in France. And it was this public profile, along with the personal passion of Kingfisher's then chairman, Sir Geoff Mulcahy, for sailing, which drove the corporation's interest in the young sailor, who months earlier had been so strapped for cash she was forced to live on board her battered boat in a Breton shipyard.
One City source familiar with the deal said: "There was a lot of thinking at the time in Kingfisher that it needed to expand beyond the UK and one of their prime targets then was Castorama. They were aware they were almost unheard of in France and they needed to raise their profile if it reached the point of seeking backers in the Paris markets. The French are sailing- mad and when Ellen showed up they saw what was effectively a bargain opportunity. It was not all about generosity to aspiring youngsters, by any means."
Bargain it certainly was. Within the first three years of the sponsorship deal, Ellen MacArthur had secured her ground-breaking second place in the Vendee Globe round-world challenge and gleaned pounds 80m in free publicity for Kingfisher, which completed its takeover of Castorama in 2002.
The company recently released its own figures which show that between 1998 and 2001, it had nearly 10,000 mentions in 8,000 newspaper articles across 23 countries as a result of its association with her. The cost of buying newspaper space to reach the same audience, some 4.85 billion people, would have been pounds 15.4m.
B&Q - slogan, "You can do it" - estimates its gain in free publicity from its sponsorship of the sailor at pounds 95m. David Roth, B&Q's marketing director and the man in charge of the pounds 2.5m annual deal, said: "Even as a hard-arsed retail director looking for a return on investment, it has been extraordinary."
Hitherto, B&Q had relied on an advertising strategy emphasising its empathy with ordinary homeowners rather than an ocean-going "superwoman" to shift its stocks of paint, ironmongery and bathroom suites.
The sports sponsorship industry in Britain has grown from pounds 4m a year in 1975 to pounds 430m this year. Globally, the industry is worth more than pounds 13bn a year. Ceri Glen, an analyst with the London-based consultancy Redmandarin Ltd, said: "Sports sponsorship is about tapping into people's passions, whether it be Formula One or David Beckham or ocean-racing.
"If people are inspired by Ellen MacArthur, they will associate that sponsor's brand with her. It might not seem relevant when you are going off to buy a tin of pint but it adds a dynamism to B&Q. After all, their slogan is, `You can do it'."
Dame Ellen makes regular appearances at B&Q store openings and gives motivational talks to workers and management. Top-achieving staff are even awarded a day's sailing with her.
But another sponsorship consultant said yesterday: "B&Q even made sure she took their powertools on board to make any repairs. On one level that is good business but on another it looks as if the sponsor is getting greedy. Rather than make people rush to the shops, research shows that turns them right off."
Additional research by Oliver Duff and Magda Ibrahim
SPONSORSHIP WINNERS ... ... and losers
Profits sank at Shell after oil and gas prices plunged in 2001, but the drop was cushioned by the success of Schumacher, who won the driver's championship that year. The German, in his Ferrari, fronted a massive marketing campaign for the launch of Shell's unleaded petrol Optimax, and won titles in 2002, 2003 and 2004, giving the company a high-profile return for its estimated $30m (pounds 16.1m) million a year sponsorship deal with the team.
Adidas was quick to sign up the promising 18-year-old in 1997, but they could not have imagined it would be an Adidas boot Wilkinson wore as he kicked the winning points in England's 2003 World Cup victory. Wilkinson's deal, worth pounds 250,000 before the World Cup, was renegotiated along with his other deals with Hackett, Tetley beer, Lucozade, Lloyds TSB and Mercedes. He is said to have earned pounds 4m in the six months after the final.
David Beckham and Brylcreem et al
David Beckham remains the doyen of advertisers. Even his cock- ups have come good for the associated brands. In 2000 he shaved off his locks, jeopardising a pounds 4m contract with the hair cream brand Brylcreem. Luckily the stubble grew back and the sponsor stood by him. Last year Vodafone was said to have considered dumping him after his alleged affair with Rebecca Loos (particularly reports of their "text sex"). In both cases he was considered too valuable to lose.
The 15-year-old became the youngest player in a championship game in the US in any sport when he took to the field for DC United in the Major League Soccer cup final in November. On the eve of his 14th birthday Nike gave the Ghanaian immigrant a $1m deal - a snip when one considers he boosted audiences everywhere he played last year by 74 per cent. MLS signed him on a $2m, four-year deal, the largest for an American soccer player.
Samsung and the Olympics
Fifteen years ago, Korea's Samsung was considered one of the lower brands of consumer electronics; it is now a close rival of Sony and Panasonic. Part of its rise has been due to membership of the International Olympic Committee's "Top" programme since 1997. While membership sets back the dozen sponsorship partners an estimated $40m (pounds 22m) over four years, it brings with it the right to use the heavily trademarked Olympic rings.
Julius Francis and the `Daily Mirror'
Sporting tradition has it that you back the winner, but the Daily Mirror sponsored the British underdog Julius Francis in his January 2000 fight against Mike Tyson. The paper paid him pounds 20,000 to display its masthead on the soles of his size 12s and the boxer's "243-second public humiliation" in which Tyson knocked him down five times, should have had accountants crowing. But rival papers and most broadcasters refused to mention or show it.
Roy Keane is known for his hot temper but 7-Up signed him to front its campaign for the 2002 World Cup. The Ireland captain picked up pounds 500,000 but his endorsement went flat because he came home before the finals started, after a row with the manager, Mick McCarthy. Posters were ripped down and defaced in Dublin but specifically produced cans had already been distributed. The company said it was "as shocked and disappointed as anyone else in Ireland".
Mike Tyson and Pepsi, Kodak, Toyota, Suntory
Tyson's sponsors - worth $4m to him annually - were eager to ditch him after his conviction for rape and imprisonment in 1992. The prison sentence heightened fascination with Tyson, but by the time the boxer became inmate 922335, sponsors had run a mile. Comparisons with Muhammad Ali's comeback after jail were hogwash and "Iron" Mike blew $300m - leaving him with $40m debt before he was beaten by the Briton Danny Williams last year.
Pete Goss's state-of-the-art catamaran Team Philips was ripped apart by hurricane-force winds in December 2000, during a sea trial for a round-the-world race later that month. Already plagued by technical problems, the crew abandoned the vessel 650 miles off the coast of Ireland. Goss searched, without success, for wreckage of the pounds 4m, 108ft flop - half of which was funded by Philips. Two of Goss's companies were wound up in April 2001.
Nike dropped the athlete Kelly Holmes when she returned home from the Sydney Olympics with only an 800-metre bronze medal. The sportswear company then signed a $1m (pounds 540,000), four-year deal with Paula Radcliffe. But Nike lost their gamble when Holmes returned from Athens a double gold- medallist, while Radcliffe suffered a double failure in the marathon and 10,000m. Unfortunately for Nike, Radcliffe was not able to "just do it" in 2004.
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