Firms fight for share of spoils

Date: 04/06/1998

By Chris Johnstone

PAPARAZZO Pete, as he was known to his colleagues at the Evening News, woke up to the fact that advertising and sport meant serious business when a well-known insurance company demanded that he and his fellow photographers should not perch in front of its advertising boards at the local first division football ground.

The chance that an audience of millions might miss a glimpse of their publicity on television was more than the company could bear. It put pressure on the club, and Pete and his colleagues were moved.

Ten years later, there is little question that sport, advertising and money are part of an inseparable, if not always winning team.

This year, around 3.5 billion ecu will be spent in Europe on sports sponsorship alone, close to treble the amount registered in 1990.

Advertisers and the European Commission have woken up to the fact that sport, after sex, is the most potent sales tool on offer. The passion it evokes can open or close markets and make or break products and companies.

An estimated 3 billion people will watch the orgy of football being served up by this month's World Cup in France. This forecast prompted fierce competition between advertisers when the tournament was in the planning stages, as firms fought for the privilege to spend a small fortune to become an official sponsor.

Sponsorship and sports rights have become a battleground for the Commission, but one where the tactics differ widely according to the Commissioner captaining the team. The institution has steadfastly refused to rule on whether a French ban on an international brewery officially sponsoring the World Cup clashes with single market rules. France argues that the measure is allowed under its Loi Evin, which prevents the advertising of alcohol on health grounds.

Meanwhile, the favoured sponsors such as the fast-food chain McDonald's are looking to profit from their official status and the World Cup logo plastered all over the EU.

In the meantime, sports-loving Competition Commissioner Karel van Miert has shown no hesitation in vetting the attempts of media magnates to corner sports broadcasting rights.

His scrutiny stems from a belief that big events should be available to all, and the simple fact that anti-competitive positions in sport feed down the line into spin-off industries such as broadcasting.

Cable television companies have realised that exclusive sport is one of the only inducements capable of making fans part with their cash and sign up to services. This was enough to spark a 'soccer rights war' in Spain last year between rival digital companies Canal Satelite and Via Digital.

The aftermath included a Commission proposal that national governments should draw up lists of important, 'protected' sports events which should be available for screening by public broadcasters.

Van Miert and the Commission have walked a tightrope in trying to encourage an influx of fresh cash for clubs, safeguard competition and protect the viewing public.

Competition officials have held up the agreement giving cable broadcaster BSkyB rights to screen live games from the English Premier League and public broadcaster BBC the right to retransmit a few hours later as a model to follow.

However, they chose to stay on the sidelines when sports rights for national teams in Italy and Scotland were bought by broadcasters which were unable to transmit throughout the country. In an ongoing case, the Commission is waiting for the German soccer federation to explain how its system of selling exclusive rights to broadcast European matches operates, amid suspicions that the obligation on clubs to sell their rights collectively is in breach of anti-cartel rules.

A similar probe centres on the Formula One company's hold on exclusive broadcasting rights for Grand Prix motor-racing.