Two main themes

The conference entitled “Sport + Business”, held at the Moscow Hotel Baltschug Kempinski on March 5, 2004, brought together representatives of a wide range of professions: managers of sports clubs, marketers from manufacturing companies, representatives of research and consulting companies, owners and managers of fitness club chains, lawyers and PR specialists. The reports of the speakers at the conference were mainly devoted to one of two topics: investing in sports for subsequent profit-making and using sports themes for the purpose of promoting products and services.

Sports Marketing

Foreign manufacturing companies realized that sport is a good mechanism for promoting their brands not so long ago, only some 12-15 years ago. Therefore, it is not surprising that in Russia, with its relatively undeveloped consumer market, sport in advertising and marketing is a new thing. As the general director of the company “Telesport Marketing” Petr Makarenko emphasized, only a few companies “are engaged in sport” in the Russian market.

According to Makarenko, the main problem is that companies are used to direct advertising. It is a clear and familiar tool. Whereas promoting products and brands through sponsorship of sports clubs, teams, sports events and TV broadcasts is an unknown, much more complex and labor-intensive tool that requires a careful, subtle approach.

In addition, according to Petr Tsanava, executive director of Bosco Sporttovary LLC, the development of sports marketing in Russia is hampered by the lack of genuine stars and real super clubs.

However, those who have already joined sports marketing realize its necessity. “A large volume of direct advertising, with rare exceptions, causes rejection in the audience,” explains the need for sports marketing, Marketing Director of the Baltika Brewing Company Andrey Rukavishnikov. But the world experience of large international companies is especially convincing.

According to Sergey Pevnev, Head of Strategic Planning and Marketing Communications at Samsung Electronics Russia, after the company's participation as a sponsor of the Olympic Games in Salt Lake City, those who knew about Samsung's sponsorship had a 10% increase in their positive attitude toward the company's mobile phones. And the number of people wishing to purchase a mobile phone from this company increased fourfold.

Sports Investments

When talking about investments in sports, it is worth starting with the worst: not a single Russian sports club pays for itself. As all the experts and managers of sports clubs interviewed emphasize, the problem is primarily that the Russian fan is still a poor fan. He is not able to pay the same money for a ticket to a match as fans in Europe pay. The average European price is 30-60 euros per ticket. In Russia, prices cannot yet be that high. “If tickets cost more than $10, people will not buy them,” says Petr Makarenko.

The same problem applies to the money clubs receive for broadcasting matches on TV. Firstly, TV companies don’t pay for anything except football. Secondly, they pay little for football. And just a few years ago, TV channels themselves took money for broadcasting matches. “In European countries, the cost of TV broadcasts is much higher,” says Makarenko. “For example, a national

The football championship, one of our projects, which we have been working on for three years (from 2002 to 2004), cost Russian television $16 million and something. Similar contracts in countries where football is practically a religion – Italy, Spain, England – cost 10–20–30 times more.”

According to FC Spartak Vice President Anna Zavershinskaya, advertising in Russia is “some kind of vicious circle.” “If we don’t make serious sales during sporting events,” she says, “then the advertiser isn’t interested in placing ads during TV broadcasts. Accordingly, TV companies aren’t able to earn much on sports. And that’s why we also don’t have the opportunity to sell TV rights for an amount that’s even an order of magnitude comparable to Western figures.”

Given these difficulties, the annual budget of a serious Russian sports club is $20-30 million. These figures are not that different from what European clubs spend. But the profits in Russia are different. It turns out that while sport eats up a lot of money, it does not bring any return.

But, oddly enough, there are now more and more people willing to invest money in sports clubs. According to David Shaginyan, commercial director of the Lokomotiv football club, this is explained by the fact that many investors simply love sports. Another reason for sports investments is the need to create a positive image for the sponsoring company.

In a situation where sport cannot make a profit, the activities of such sponsors become the only condition for the survival of Russian sport. Unfortunately, everyone who has spoken out on the pages of this magazine says that they expect the rise of the sports business only in the indefinite future.

IN GENERAL: In the process of formation