I have been lucky enough to work in the sporting commercial space with a huge variety of rights holders, ranging from volunteer clubs to governing bodies right up to some of the most professional clubs in the world.
Recently, I’ve begun to wonder what the key commercial differences are between a governing body and a pro team. What are the opportunities, challenges, and trends that we see across these two vastly different models of sporting organisations? And more importantly, how could each learn from the other?
Governing Body v Professional Team
When I compare a governing body and a professional team, I’m not saying that a governing body can’t manage a professional team or that they are not run like a professional unit. What I am referring to here would be the PGA (governing body) vs an NBA team (pro team).
Operationally, which also reflects commercially, the key difference here are the stakeholders that each organisation may be responsible for. Often, a governing body’s priority will be centred around the grass roots, participation, and overall governance of a particular sport or competition. In contrast, a pro team is likely to have their priorities centred around the performance of a senior team and the commercial sustainability of the organisation.
With those priorities come a variety of different commercial scenarios such as:
- For governing bodies, commercial events are not often a day-to-day events like they are for a pro-team.
- Most times, the value in partnering with a governing body comes from their access to grass roots participants compared to the possible media exposure a pro-team can provide.
- The draw of resources across a variety of projects or initiatives is often more spread out within a governing body; “more mouths to feed” as they say.
- Pro teams have more access to commercially valuable talent e.g. players or officials, on an ongoing basis. Governing bodies usually have less access given their limited time frame and overall contractual obligations.
Use of agencies and third parties
One trend I have noticed is the different role that agencies or other third parties play in a governing body compared to a pro-team. These agencies may include commercial partnership acquisition, event delivery, strategic planning, or project fulfillment.
As outlined above, most governing bodies are not set up to manage day-to-day commercial events or opportunities and, instead, are normally focused on a few key strategic events throughout the year.
The use of agencies, by either type of organisation, will obviously depend on the internal capabilities of that organisation, however, as a generalisation, we are seeing agencies play a bigger role in event delivery and reporting for governing bodies, compared to pro-teams. Their ability to streamline the delivery of one-off events, or tailor a solution for different markets and locations, has meant that a governing body is more likely to rely upon external expertise for the execution of commercial events.
That being said, we are seeing both types of organisations starting to utilise a variety of agencies across the digital and fan engagement space. The trend here is that the technology, consumer trends, and industry-wide insights are changing so often that there is a greater need to be nimble and flexible rather than attempting to resource this internally.
Similarly, both types of organisations are now seeing how these agencies can play a large role in making them commercially sustainable and helping them to tell certain stories to commercial partners.
There are a few challenges for each type of organisation when comparing their commercial partnership capabilities. So, I’ll just focus on one each.
The ability to invest in commercial partnerships, fan engagement, game day activations, and new technology is limited by the requirement to fund such a wide variety of programs and teams.
Traditionally there may have been a historical focus on game development or getting a team to the Olympics rather than making investments in commercial programs. Altering these priorities, or at least drawing them level, will take substantial time and energy.
In this new age of commercial partnerships model, often, partners’ objectives will centre around community engagement or building an audience. This then usually centres back to a large registration database which governing bodies normally have ownership over.
How do we then turn any challenges into opportunities?
For Governing Bodies
For governing bodies, it is time to take these other programs, like game development, multi-cultural events, diversity events, or Olympic teams, and turn them into your point of difference.
Utilise your larger participant database to create targeted campaigns. Utilise your multiple touch points with your participants to ensure you have a rich data set for each. Use these insights to empower your partners with real consumer cut-through rather than needing to rely upon large TV exposure.
If you are a pro team, often, you will have spent a substantial amount of energy and resources into creating great supporter allegiance, loyalty, and apathy. Instead of needing a large number of database entries (participants) you are able to communicate with, you are able to rely upon your ability to create brand advocates. You are able to use your fans likelihood to engage with digital content as a true selling point as opposed to just total eyeballs.
Where would you rather be?
What we are seeing is the rise of those rights holders who can access assets from both a governing body and pro-sport organisation to tailor a truly individual commercial partnership and address multiple objectives.
This, coupled with the increased role being played by agencies and data, has meant that there really is no longer a ‘grass is always greener’ position for rights holders.
It is now about turning each commercial challenge into an opportunity.
Written by: Sam Irvine
KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.