VOR AUCTION - OPPORTUNITIES LOST & STILL THERE?

[jack_sparrow]

Assuming Volvo naming rights come with the rider that China remains a stopover (on account it is their largest vehicle market and only exceeded by Europe in total), how many IMOCA teams realistically will want to do that round robin in a boat not designed for it?

 

[despacio avenue]

A sharp observation. In an ideal situation a big corporation with a sailing CEO would have bought VOR for say EUR 50 million or so. 8 boats on the balance sheet or so  plus the other half for goodwill. In return the CEO does his hobby and gets (brand)exposure. Volvo hands proudly the keys to the new owner and are very happy to drive away in their car as fast as possible. The VOR directors do get a nice pay raise and/or bonus and everybody lived happily ever after.

Not so. No one wanted to pay the required amount. The next best thing for all involved is this solution. Or the nuclear option, pull the plug. I’m happy that that last option has not come true yet. The next edition will be critical to evolve/expand/make money for all. Save money for sponsors by using the VO65’s a third time. There is no budget for a new class. Add the Imoca’s for more exposure. It’s a poor man’s solution, but let’s hope it will work because the alternative is the plug.

Doug DeVos. But probably too busy with AC and TP52s. 

 

[despacio avenue]

During the last finish in Gothenburg I had dinner with a friend.
Of course we discussed the race in general and sponsorship.
This was, remember, the edition where Vestas were parked on an Indian Ocean shoal.
At this time I already knew about the Vestas Business Case for being in the race (it is not a secret, the right people can find the interview online).
During the after dinner drinks, we agreed that they would be the perfect sponsor for the race.
Of course they didn't listen, but I still think it would be a great idea.
This edition has further shown that their luck with boating is not the best, so I just wanted to put it out there.
Vestas, stop sponsoring boats, but take ownership of the race, it is the best possible fit with your agenda and your business case.

I just saw a full page "ad" in The New Yorker for Vestas. Not a trade magazine. I agree with you, ModV, that they cb a good owner for the race. See also my comment re Doug DeVos below. 

 

[jack_sparrow]

In an ideal situation a big corporation with a sailing CEO would have bought VOR for say EUR 50 million or so. 8 boats on the balance sheet or so  plus the other half for goodwill.

Herm why would anyone pay goodwill for something that comprises the name Volvo? In fact it would have negative value being the cost of physicaly removing it.

 

[jack_sparrow]

This is a recent interview with the chief digital officer of the VOR, talking about the marketing of the event and the challenges of connecting sponsors with a worldwide sailing audience.

http://www.chiefmarketer.com/qa-volvo-ocean-races-sponsorship-adventure/

 

[DickDastardly]

Assuming Volvo naming rights come with the rider that China remains a stopover (on account it is their largest vehicle market and only exceeded by Europe in total), how many IMOCA teams realistically will want to do that round robin in a boat not designed for it?

Like Opti of Finn sailing - "sure the boat's a shitter and ill suited to the course, but if everyone has one we've got a level playing field"

 

[jack_sparrow]

Like Opti of Finn sailing - "sure the boat's a shitter and ill suited to the course, but if everyone has one we've got a level playing field"

Dick I was thinking more along the lines that not being designed to go uphill are they at risk of diminishing their lifespan, both at the GP end first up then at the backend for use as a Corinthian?

If there is something to that, then maybe a China stopover might not be the fait accompli many think?

 

[DickDastardly]

Dick I was thinking more along the lines that not being designed to go uphill are they at risk of diminishing their lifespan, both at the GP end first up then at the backend for use as a Corinthian?

If there is something to that, then maybe a China stopover might not be the fait accompli many think?

Ah, good point.  

 

[jack_sparrow]

Actually the more you look at it if a China stopover is not the fait accompli many think, then that raises another question about Volvo retaining race "naming rights" for the next edition. 

The RO's Press Release is silent on this issue. Putting aside Shangs argument that there is a strong appetite for both the race and team sponsorship in China (albeit on the black side of the ledger only) and that being a quite valid view, if China is no longer a stopover this puts a big dint in Volvo's local marketing asperations using the race. Therefore it could well be the deal does not include race "naming rights".

If both a "No Automatic China" and a "Cleanskin Race" is the deal, then this offers up two things, amoungst many.

1. It makes the next edition a clear "transition" from past to future and not just an extension of the present with a different boat mix.

2. It obviously opens the race up to potentially wider team sponsorship opportunities and global audience (nett any reduction  in China), particular in North America a market where the race is currently soft. That in turn makes it more attractive to IMOCA if they ultimately step up as participants/stakeholders.

All that aside the new underwiters of the RO are going to need balls of steel to see this thing through. I hope they have the appetite for that and know how to chew.

 

[Herman]

Herm why would anyone pay goodwill for something that comprises the name Volvo? In fact it would have negative value being the cost of physicaly removing it.

I typed in an ideal situation for Volvo, best case scenario. Rebranding will cost millions in marketing, and lot’s of time. Years. That is much worse than getting the logo’s off the boats, website etc. which can be done relativly quick and cheap. Say EUR 150k and the new logo and name is everywhere. But the rebranding will take years because the name Volvo is stamped on the race for decades and into the heads of the fans (read consumer target group). It will take 1, but probably 2 editions before that brand mark Volvo has gone in our heads imho, if VOR has been taken over by a new main sponsor. That’s the catch why no one wants to buy it. And still everyone will call it the VOR instead of FOR.

 

[jack_sparrow]

But the rebranding will take years because the name Volvo is stamped on the race for decades and into the heads of the fans (read consumer target group). It will take 1, but probably 2 editions before that brand mark Volvo has gone in our heads imho, if VOR has been taken over by a new main sponsor. That’s the catch why no one wants to buy it. And still everyone will call it the VOR instead of FOR.

Herm I remember very well when Volvo took over in 2001 and yes your right it took some time. One of the reasons being in the 2001/02 Edition they were still using a carry over from the Whitbread 60's but rebranded as Volvo Open 60's. However by the time of the next edition the Volvo Open 70 helped conclude a speedy race name transition.

Now as of yesterday 45 years of history has been turned on its ear. The RO is no longer a product entity. However that changes imediately if the RO is to sell "naming rights" and then the transition will be difficult just as you say. However it goes beyond that because the "Race Name" then has a life span only as long as that "naming rights" contract. Isn't that revolving door scenario a wonderful thing to look forward to.

If that is not the only complexity you then have a situation of the future containing mixed fleets, some carrying the brand of the RO/Naming Rights holder and some not. How attractive is that to both parties marketing aspirations racing under a commercially branded race?

What is easilly forgotten is the teams out there now in a small fleet of seven are collectively spending in excess of €100M and some teams with budgets that dwarf others. On the other hand the RO's nett expenditure including after recovery via team contributions etc and other minor tier sponsors is a mere fraction of that €100M plus. However we have a situation of the tail wagging the dog. No better example of that is the fury expressed by some teams post the Newport finish fiasco, after forewarning the RO prior to leaving Alicante something like could easilly be avoided.

I don't know of one, but I'm sure there are examples, of one iconic professional sporting event, global or national that is encumbered with a commercial name. The reason for this is simple. Commercial sponsors don't like their money going towards supporting someone else's marketing endevours.

For instance how long would Red Bull stick around to show up every fortnight to contest the Pepsi F1 Challenge? How long would advertiser's pay an arm and a leg for 15 second media slots during the Superbowl or Tour de France if those events suddenly had a "commercial name"? Not long I suggest.

The RO transfer for this race presents many challenges as well as opportunities for building it's support and financial base. Having a "cleanskin" race name is just one thing that supports the latter.

So I don't believe I'm alone in saying that in the next edition or the one beyond that if we find ourselves watching the "Samsung Global Challenge" or something, then it will be time to finally say goodbye to an old friend that died under their own hand.

 

[despacio avenue]

I agree with most of what you have said above, Jack. However, just FYI, virtually every college football bowl game in the US has a sponsor name attached to it: it is no longer just the "Sugar Bowl", the "Orange Bowl", the "Cotton Bowl" or the "Rose Bowl". Rather, we, sadly, have the Allstate Sugar Bowl,  the Capital One Orange Bowl, the Goodyear Cotton Bowl,  and the Rose Bowl Game presented by Northwestern Mutual. There is also the Hyundai Sun Bowl, the Play Station Fiesta Bowl, the Outback Bowl, the Chick-fil-A Peach Bowl, the Cheribundi Tart Mutual Cherry Boca Raton Bowl, the Bad Boy Mowers Gasparilla Bowl, and the Lockheed Martin Armed Services Bowl, to name a few more.  And there are others. The name "Superbowl" is copyrighted by the NFL and they judiciously protect and prohibit marketers and advertisers from using it.  

 

[jack_sparrow]

However, just FYI, virtually every college football bowl game in the US has a sponsor name attached to it

I did preface it being iconic and professional to avoid capturing a lot of branded amateur stuff.

I don't know of one, but I'm sure there are examples, of one iconic professional sporting event, global or national that is encumbered with a commercial name.

 

[Potter]

Wimbledon 

 

[southerncross]

Rolex?

 

[Rennmaus]

(...)

Anyone going to Gothenburg or Den Haag & fancy a pint?

SS 

Count me in for both.
Love you opinion about China, as I work with Chinese colleagues all day long. Sometimes I agree, sometimes not at all, so it would be nice to hang out a bit.

 

[Mambo Kings]

I don't know of one, but I'm sure there are examples, of one iconic professional sporting event, global or national that is encumbered with a commercial name.

I'm sure it would have occurred to you eventually but there is, of course, the iconic global event that was branded by Schweppes.

https://sopyc.com.au/viper-640-world-championship-2018/


Schweppes Viper 640 World Championships 2018






I am , of course, just kidding because you make a key point.

 

[Mambo Kings]

For instance how long would Red Bull stick around to show up every fortnight to contest the Pepsi F1 Challenge?

Bingo. Which is why my "educated guess" was that the race would not be purchased by a single sponsor but by a management company. (I disagree slightly with Cap'n Jacques regarding naming opportunities BUT the thrust of his reasoning is spot on. ) 

Separating ownership and management from a single sponsor can (if well executed) enhance the offering for sponsors and teams......including Volvo Cars.

FWIW: My slight disagreement from Brother Jake is that the race title can be strengthened in a way which will still allow for significant funding from naming rights.   Whether they choose the "Ocean Race" or "Round The World Race" , the race title can be strengthened to survive naming rights bids.   D Avenue gave some good examples in college ball. The Sugar Bowl will always be the Sugar Bowl whether sponsored by All State or Farmers because the competition title is so strong. I think returning to the original title "Round The World Race"  will signal a return to roots and a sense of history that will allow naming rights without diminishing the opportunity for other sponsors.   The RTW brought to you by Vestas (unlikely IMO)  or the Volvo RTW race (I think they may stand up to be anchor sponsor for at least one more round) will allow for a continuity of the event with different anchor sponsors and more importantly continuity in the absence of a single anchor sponsors if multiple anchor and large team sponsors appear. 

BUT again, I 100% agree with the Sparrow that independent ownership/management from sponsorship is way of future.

 

[Mambo Kings]

Remember that the financials and positioning of the RTW/OR event is fundamentally different from almost all other sporting events because the sponsorship opportunity is so uniquely B-to-B.

It is however worth noticing that Volvo Group has dropped off as sponsor.  One discussion that the management group will be having is how to reward their anchor tenant Volvo Cars without giving a free ride to Volvo Group.  That will be interesting because I dont have an answer.

 

[Miffy]

Remember that the financials and positioning of the RTW/OR event is fundamentally different from almost all other sporting events because the sponsorship opportunity is so uniquely B-to-B.

It is however worth noticing that Volvo Group has dropped off as sponsor.  One discussion that the management group will be having is how to reward their anchor tenant Volvo Cars without giving a free ride to Volvo Group.  That will be interesting because I dont have an answer.

Geely won't care - it is the largest voting shareholder of Volvo Group anyway.