Any major sponsorship announcement is excellent news for the sport of sailing, especially if it involves a major automotive brand. According to our sources this three-year agreement with Land Rover is valued at approximately 2 million euros, although no official confirmation has been given. We caught up with Mark Turner and talked about this newly-announced deal and the overall state of affairs of the Extreme Sailing Series. This very interesting and long interview will come in two parts. Here’s the first installment:
VSail.info: Securing such a partner is undoubtedly excellent news for the Extreme Sailing Series. Can you first of all give us any detail on the financial part of this three-year deal?
Mark Turner: No, I can’t give you that information but I can tell you it’s significant enough for us to have an important impact and significant enough for Land Rover to care about making it work.
VSail.info: What does Land rover get exactly in this deal? From what I see, you didn’t sell the naming rights to your circuit.
Mark Turner: Land Rover is the first one of the two Series Main Partners, top level sponsors that share the main partnership with the circuit. Both those partners have Trophy rights to half of the events which means half of the events could be for the Land Rover Trophy. However, the overall circuit is still called the Extreme Sailing Series and neither of those partners has naming rights to the circuit.
VSail.info: Do they also name the events? Will we see, for example, the Land Rover Qingdao event?
Mark Turner: No. That could have happened if we had the discussion about much more rights and they had put more money but we were very keen not to cross that level and it fitted their budget. In addition, going forward we can get more from two partners activating in different ways and at the end of one contract you don’t necessarily lose everything either.
VSail.info: Does that mean you are not interested in having, let’s say, AUDI, to name another major automotive brand, coming and buying the rights to the AUDI Extreme Sailing Series, in a similar fashion they did with the Medcup?
Mark Turner: If we had someone coming with the right amount of money, I am sure we wouldn’t have said no. The fact is that with the budget Land Rover had in mind going into, corresponded to a level below and we were actually very keen to look for two partners at the same time, in different sectors, rather than just one sponsor. It suited them as well and we are still looking to find a second partner. At one point we thought we might end up with both deals at the same time but actually we need to work more on that first partner and set the base for 2014. The announcement of Land Rover will help us towards concluding the discussions with the second one. From a credibility point of view this is a big thing.
VSail.info: A number of major European automotive brands such AUDI, BMW and now Land Rover are or have been sponsors of major sailing events or teams. Why do you think sailing attracts such companies?
Mark Turner: I think you must ask them instead.
VSail.info: How did it work then in your case with Land Rover? Did they approach you or did you go knocking on their door?
Mark Turner: We had some connections within a network of people around them but also Jaguar, which belongs to the same group, was into sailing. Actually, the way it happened is that they commissioned an agency to do a research on what sports they should be in and sailing came up as one of those sports. Then, inside sailing they looked for a global, annual property and as you very well know there aren’t many of them. They wanted something that was more urban focused rather than ocean sailing. They want to entertain clients in cities and countries that are of interest to them. We were very well placed for that thanks to the investment we made to take the event global and, on purpose, focus on markets that for most companies are key, global markets. It takes time to change that and evolve but it fitted very well with what they were after.
However, I can’t really answer why premium car brands are attracted to sailing but obviously, their research does point that the image of sailing, its demographics and the relative wealth of people in and around sailing fit very well with their brands.
VSail.info: Doesn’t that, unfortunately, confirm the stereotype that sailing is for wealthy people? Isn’t it also in contradiction with what you are trying to achieve, bring the sport of sailing closer to the masses?
Mark Turner: I think sailing needs both of these things and countries where there is a rapidly growing wealthy middle class for sure are a target for such companies. There are car brands much more expensive than Land Rover and I wouldn’t say we are talking about elitist, we are talking about ambitions and aspirations. They want people that are developing their wealth to think about them first.
I agree with the point that, generally, sailing is a bit of a complicated place. It does attract very wealthy people as well as a segment of the society that is very different to a mass market. That is not necessarily a bad thing. There are lots of sports in a similar place. Golf is probably not dissimilar and when a study is done properly, golf comes up with sailing as a very similar thing, even if they are very different sports.
I think sailing has different areas. It has a private owner side that could be as wealthy or not as you like. From a dinghy club in the middle of a lake in the UK to very wealthy individuals in Costa Smeralda that pay professional sailors to sail their boat. That’s fine and it’s an important part of the sport of sailing. The bit we are in is purely commercial and inside that commercial space in sailing you can have the Vendée Globe or the Route du Rhum and it works very well for lower-end brands that look for a mass market. You have companies that sell frozen food or fireplaces. Inside sailing there is a whole range of products and countries where the image is very different. I think there is one rule for the sport and it is to put the right product with the right brand in the right countries.
As a minority sport, which sailing is, ultimately you are still better off being in a place where it is viewed more premium rather than mass market because you have more differentiation, more chances to exist. We can’t fight football, we don’t even need to line up against football and we have to stop pretending we can deliver media coverage that is equal to football. We do need a strong media platform though because it supports all the other elements but it’s not the other way round. People that boast about stupid media numbers or try to sell something on media coverage are wrong. However, you need good media coverage but it’s in order to support the B-2-B and internal comms operations. It’s part of the delivery but it’s not the sell.
VSail.info: Will the entry of Land Rover change the global geographical focus of the Extreme Sailing Series?
Mark Turner: There are two parts to answer your question. I don’t think we would have managed to do a deal with them if we weren’t already quite synchronized with what their desires are in terms of geographical markets. It’s not different to SAP either. In the same way, SAP is an important technical partner to us and they have a team. Any global, premium level brand has a pretty similar list of key markets in the world. They might not be identical but they are pretty similar and it’s not hard to pick out the countries. China is obviously there, Brazil is quite often in there, some of the wealthier European countries or the US.
There is a list of probably 12-15 countries where all of these brands have a big overlap. However, one of the parts of the deal with a Series Main Partner is for them to have a strong influence on where we may go and they have the ability to push us in a way that the teams can’t in their requests to go to a specific country. They could tell us they would like, for example, to be in the US or Russia within the next two-three years and we will have to go there. We will have to find a way to go to those countries. They absolutely have that influence and it’s part of the agreement with them. Still, that will not change anything radically in any year since we are already in a good number of their key markets, and of course, we, as an event, want to be in those countries.
VSail.info: What will you use the cash from the deal for? Pay the bills or grow and expand in the future?
Mark Turner: A bit of both. It’s not a deal that changes the world in that sense. Inside the deal there is a co-marketing budget and a boat-activation budget. They will have a Land Rover Extreme 40 boat that will be at most of the events and I think that, probably, these are more important than the actual cash part. It is sailing in Qingdao but it’s not taking part in the races and that is helping us get more people sailing. One of the first things I told them during negotiations was that we needed to include the boat in the package. It’s fully branded, it gives them visibility and the ability to create videos and things around it. Primarily, the goal is to get every guest that comes to an event sailing, to get people out on the boat to experience what we have and what other sports don’t have. That’s part of the deal. That boat will be in most of the venues and may go to other venues as well, outside of the Extreme Sailing Series. At some point, maybe in 2014, the might decide to have a full racing campaign. That’s quite possible but isn’t part of the initial deal.
VSail.info: How do the other teams view the fact that you have teams sponsored by partners of the circuit? Do they feel you are more biased towards them?
Mark Turner: You have to ask them but I don’t think so. I think three or four years ago when iShares got a boat we were overly careful about that just to show people that wasn’t to be the case. I don’t think it’s an issue today.
China is, obviously, a very important market for both land Rover and the Extreme Sailing Series. Photo copyright Lloyd Images
VSail.info: Do you plan to add more venues to the circuit, to increase the number of races per year?
Mark Turner: I think that eight is pretty good. Eight to ten venues is probably the scope that you could do. We currently have eight venues, we had nine at some point in the past and we think this is a good number. The problem when we add a venue is that we don’t a venue deal that will cover the extra cost of an additional event. The team budgets will go up as well. So, everybody’s budgets and costs go up and the value of the extra venue is something you only realize only two-three years down the line if you sell your sponsorship packages, whether the event or the teams, for more. It’s a big investment and it’s difficult to get a venue deal that covers the extra costs.
There are plenty of other things to invest in first, such as developing the events we already have. It doesn’t mean we couldn’t go to two venues close together and limit the extra cost of that but then again you need to have a strong venue deal to do that. If you have too many events that are just two weeks apart from each other, that might be OK for F1 but not for us. You need to breathe. When we were forced to have events two weeks apart in the past, everybody was exhausted. Just from the logistics point view you can’t fit much more. When you do the shipping you can’t fit too many events in a season that starts at the beginning of March and finishes at the end of November. In Europe we could add one or two but it would be very tough to fit much more, shipping costs would go through the roof.
The really important thing for us is to keep team budgets at a low and steady level, in order to be competitive. What we have is a tight product, not a product where you go into and then each year you have to find 50% more money. There is still a big range in team budgets and you have people spending less or more money but the people spending most money are not necessarily in the front. There is a big mix and there is no rule that goes with the amount of money you spend. A team with a yearly budget of 500,00 euros plus the boat can win an event.
VSail.info: I was told by a team that the ideal team budget is closer to a million euros per season.
Mark Turner: You don’t need a million to be at the front. The big difference is in salaries and what kind of hotel you stay in, that’s about it. These are the main variables. You could add some extra people and complicate your project. One of the variables is how much inside the budget is included in communication and whether you have a PR person. Of course, I could go to a sponsor and justify more than a million euros but a 600-700 thousand as well I would be very happy to do a project, knowing that you would be very competitive.
VSail.info: How difficult was closing the Land Rover deal? How long did it take you?
Mark Turner: There isn’t any sailor in Land Rover, there was nobody that was emotionally pushing the deal. It was a purely business decision and that takes a long time. The process is actually longer. However, once you close the deal you have already covered a lot of ground, a lot of subjects. You have looked at every aspect of the deal and you have a good understanding of the things that can be improved. That process takes quite some time.
In Land Rover’s case the financial year starts in April, not in January, and that is quite challenging because, ultimately, we are never going to get decisions in September. Their equivalent of the September-December period is January-March and that always meant that if were going to get it across the line we wouldn’t be able to get it at the beginning of the season. However, when you have a CEO that decides the deal should be done, you sign a deal and then you might spend a year trying to get the team onboard, the marketing director that didn’t really want to do it and doesn’t feel very comfortable with it.
VSail.info: Do you know whether you were competing against other sailing properties for the Land Rover deal?
Mark Turner: I don’t know, I truly don’t know. They are pretty diligent so I don’t think they would have gone to us without looking at other properties.
To be continued…