News

Story by Helen Trinca courtesy of the Australian.

One of the nation’s best-known sports stars, former Wallabies captain John Eales, says the moves by some athletes against so-called sportswashing threatens the financial viability of many sports in this country. He says there probably are only a couple of sports that can cope with losing corporate sponsorship dollars but “the closer you get to grassroots level, the harder it is to run a sport”.

Eales declines to comment directly on the decision by Hancock Prospecting to withdraw Netball Australia funding after a dispute with Diamonds players over wearing uniforms with the company’s logo. But he says sponsors are “within their rights” to withdraw. “All stakeholders have rights and they can exercise them,” he says. But some stakeholders are “probably naive” about the reality of sponsors’ rights. “The current activism has consequences, potentially good and bad, but they could present a danger to sports organisations,” he says.

The netball issue emerged this month when Indigenous player Donnell Wallam called out historical comments against Indigenous Australians made by founder Lang Hancock. It followed a decision by Australian Test captain Pat Cummins not to appear in Cricket Australia sponsor Alinta Energy’s ads.

Says Eales: “There were a lot of things in the past that were just a given. If someone was prepared to sponsor you, then the brand would be a big part of your kit, for example.That is obviously being challenged at the moment and it’s really threatening that whole leg of funding. Netball is in a very difficult position but that could be the position of any sport. There might be two or three sports that have cash cows in Australia that enable them to pick and choose sponsors to a greater degree. But then there are others where it’s the absolute lifeblood of the sport and that money provides athletes with the opportunity to focus more professionally on their craft.

“That’s why it’s something that needs a lot of thought, because it’s not simple.”

Eales says one way forward could be for sponsors to allow individual players some latitude on religious or other grounds but says there have to be reasonable grounds for exemptions. If an individual in a team is sponsored and the brand conflicts with the team sponsor, it is not reasonable for that individual to refuse to wear the team logo, for example. Players should understand that “I’m largely in the position to have an individual sponsorship because of the sport I play and the team I play in”.

He says there have always been some tensions in sponsorships.

“But it is becoming more and more the case in society that people are divided on core issues and so we have to accept that where there may previously have been little tension, now there will be some tension,” Eales says.

“But life is about compromise. We live in a world where we’re constantly compromising on important things and on unimportant things, and if you know that there will be tensions then you need to understand that there will be trade-offs as well. It’s not a perfect world.

“You’re also dealing with sporting organisations that are super stretched from a resource perspective, and you’re probably dealing with naivety from some stakeholders as well, with people not fully understanding the ramifications of what happens next.”

Sports organisations and sponsors need to decide the parameters of what they are willing to trade off. “Players often don’t fully understand, and it’s understandable why they don’t understand, that running sport is really complex and balancing the books is complex,” Eales says.

“There would be no question potential sponsors would have looked at this and might think, let’s sponsor a stadium instead of the sport … but sponsorship remains a very attractive medium for a brand to communicate directly with its advocates and also to attract new advocates.

“If it didn’t do that, it wouldn’t exist, and all you have to do is to take a look around and see that sponsorship is everywhere, not just in sports.”

He says early in his career players could not accept individual sponsorships but across time Rugby Australia has carved out areas in which players can strike individual deals. He can’t recall serious conflicts between his individual and team sponsors but says when he wore specialised boots he had to black out the brand because it conflicted with the team sponsor.

Gemma Tognini, who runs a communications and reputation consultancy in Perth and Sydney, says in the past decade there has been a “huge shift” in attitudes towards corporate funding. “Previously, sponsorship of any description was viewed with a little bit of cynicism, but in my experience over 20 years, with clients from listed companies to not-for-profits, the desire is genuinely for alignment and impact, despite the fact that especially in the listed space there are often imperatives driven by a board or investors, especially in the climate space,” she says.

“So you’ve got these companies that have got organisations of all shapes, sizes and varieties knocking on the door with valid needs and putting together sponsorship proposals for the companies’ consideration.

“And you’ve got companies trying to decide where to spend their money. And there’s a genuine desire to find a partner that aligns with the values of the organisation and is going to do demonstrable, tangible good for the organisation, for the company, for the community.”

She says in the best cases, “it becomes a relationship where the entire team, from the board and the CEO through to the person who’s most junior in the business, understands the reason for the partnership, understands the investment, the shape of it and the impact of it.”

Tognini says businesses have money set aside for sponsorship and they often approach her company to measure stakeholders’ appetite, and determine areas of interest. “You might have a senior member of a team or perhaps a business founder or CEO who has been touched by a particular issue,” she says. “It might be the health of their child, it might be something that their parents have been through that they’ve lived through. That’s very, very common.”

Tognini, who is also a columnist with The Weekend Australian, says big businesses “get hit up every 30 seconds for a donation to the local footy club, particularly the businesses that work in regional Australia because they are an important part of the community”.

She says: “So they’ll sponsor a barbecue or buy the footy club jumpers, that kind of thing, but then at a bigger level, at a business-wide level, they will have a more formal corporate sponsorship environment or arrangement.”

Those arrangements could involve money, “in kind” support or even pro bono work.

Tognini says sport is popular, but not necessarily top of the list for companies looking to provide sponsorship.

“It comes down to what the company itself is wanting to achieve,” she says.

“If they’re wanting to achieve high-level visibility at a national scale, for example, and want to be able to take clients to a corporate box at the tennis, perhaps stake a claim in a particular space or sector, grow their influence as part of a commercial strategy, that kind of thing.

“But I remember a client we consulted to a while ago now, and they had a long-term, longstanding relationship with the Salvation Army. This was a large national company, listed on the ASX, massive headcount, that kind of thing, but this sponsorship wasn’t mercenary. They weren’t out there monetising that, and the beautiful thing that I observed in that relationship was that staff were so heavily invested. There were great teams from different parts of the business going off to spend days packing Christmas hampers. It was a genuine relationship.”

She says relationship and expectation management is critical in sponsorships and it’s important to strike the right balance on values and outcomes.

“I thought the statement from Roy Hill (majority owned by Hancock) was excellent, in the sense that they clearly articulated what they’re doing in the Indigenous welfare space. No one from Western Australia and certainly nobody who knows even a little bit about the company would have been surprised by that. When you dive into these issues, you need to have considered, sober conversations.

The way forward in this situation, and this won’t be the last one, is for there to be strong leadership and strong communication. It’s been said that wasn’t in place (in the netball case). A lot of the conversations, the noise that we’re hearing from certain activist groups, individual or corporate, they’re not what I would describe as considered, sober conversations.

“Moreover, I don’t think many people, if any, who were against the Hancock decision to withdraw that money would have had a clue just how important and impacting their broader sponsorship investment is in the community, particularly the Indigenous community.”

Should Gina Rinehart have left the money in place, making it clear she did not support her father’s comments? Tognini says she understands why Rinehart withdrew funds: “She had never given anyone any reason ever to suspect that she held those views. And when we start assuming that people hold the views of their long dead parents, I think that’s dangerous territory for everyone.”

Businessman James Kelly, who managed Michael Clarke when Clarke was the Australian cricket captain, says companies clearly look for organisations or sectors that align with their values and customer base. The sponsorships varied greatly between big and small companies with different objectives but an “alignment of values” is common. He says sponsors will increasingly look for more flexibility so they can exit arrangements if an organisation, for example, brings their brand into disrepute.

“There’s no doubt sponsors would now be more vigilant about these issues after what happened in netball,” he says. “I don’t think sponsors up until now have been thinking: ‘What happens if an athlete who is associated with the sport we’re sponsoring has a different philosophical viewpoint?’ I don’t think that was ever the case.

Usually it’s been the reverse – ‘What do I do if a player is caught drunk driving?’ for example.

“What’s happened in the last couple of weeks is that sports, sponsors, players, players’ agents and the players’ associations will now have to think about putting in place a process that allows all stakeholders to actually have a say ahead of a sponsor being signed up by a sport. That doesn’t mean that they should be able to veto a sponsor a sport wants to sign, but we can’t resile from the fact that sports are a collective of parties who contribute to the sport and who have views. You can’t help but think that there could have been a way through netball’s impasse with Hancock if all views had been first canvassed.

“Our big players’ associations are going to have to step up and ensure there is appropriate flexibility in the sponsorship agreement – which helps pay players’ wages – so that the beliefs or actions of one player don’t blow up the whole contract. So how do they provide the ability for a Muslim, for example, if it’s a KFC sponsorship, to say: ‘Well, I don’t want to wear the KFC logo on my jersey because of my religious beliefs.’ Or alcohol, or gambling? You need flexibility in the contracts to accommodate the range of beliefs that people have.”

Kelly says the issue now is whether big companies such as Alinta will continue sponsorships: “Could they be bothered? They might just go: ‘Look, it’s actually too hard.’ ”

He agrees sponsoring sports in this country is a “no-brainer” because of the reach across demographics, but says: “What I am not sure of is whether they actually get a reasonable return on the investment. I guess they do, otherwise they wouldn’t keep coming back. But if there are more complications then maybe some companies will be happy to sit out.”