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Soccer clubs losing sponsorships

Teams face revenue losses of up to 25 percent as ads dry up

By František Bouc
Staff Writer, The Prague Post
August 30th, 2006 issue

The burgundy Sparta Praha jersey no longer bears the Eurotel logo.

Sparta Praha, the most decorated soccer club in the Czech Republic, has won nine of the past 12 Gambrinus liga titles. So why is the powerhouse club's marketing appeal suddenly in the bush leagues?

Five matches into the new season, Sparta's traditional burgundy jerseys remain free of any commercial logo — and not because of any advertising ban.

Rather, it's because telecommunications giant Eurotel has decided not to renew its six-year sponsorship, which expired in June.

"We've reassessed the objectives of our sponsorship activities," said company spokesman Martin Zabka.

If it's any comfort, Sparta is not alone.

The club's crosstown rival, Slavia, was forced to replace its main sponsors each of the past two years, after gas station chain Benzina and national air carrier Czech Airlines both dropped soccer from their marketing campaigns. And during the off-season, the construction company Stavo Artikel withdrew its support for FC Brno.

The advertising exodus is leaving clubs with big financial holes to fill and creating concern about the fading popularity of the sport.

Sparta, by far the richest club in Czech professional soccer, has traditionally relied on its main sponsor to provide more than 10 percent of its 300 million Kc ($13.7 million) annual operating budget.

For smaller clubs, primary sponsors often provide as much as 25 percent of total revenue. And all are finding it more and more difficult to find companies willing to back them.

Daniel Köppl, editor-in-chief of the Prague-based Marketing & Media magazine, said the reason for increasing reluctance to back teams is directly related to a drop in the quality of the competition on the field.

"Attendance is going down, so their sponsorship does not have adequate impact on people," Köppl explained. "Big companies are now more hesitant than ever about whether or not to invest in Czech soccer. They are re-evaluating what kind of returns they can expect on such investments."

National problem

Even the Czech national team, the country's most attractive advertising property, is losing its appeal to sponsors. A disappointing performance in this year's World Cup and the expected retirement of a handful of key players caused official business partner ING Bank to let its four-year contract with the Czech Soccer Association (CMFS) expire in mid-August.

In a written statement, ING said that it plans to focus on a different marketing strategy.

Jan Kinda, director of STES, which markets the Czech national team, said the club was unable to fulfill ING's future expectations.

CMFS officials said they have already been in talks with an unspecified financial firm about sponsorship and should make an announcement soon, but Sparta has been singing that same song with little results.

After months of negotiations, Sparta's deal with an undisclosed Austrian multinational company has not yet materialized. The company's headquarters recently rejected the deal, said Lukás Pribyl, Sparta's communication director.

"We're still searching for a new main sponsor," Pribyl said, ideally a long-term partner. "If we wanted mere cash in return for putting the sponsor's logo on our jerseys, we could agree on a deal with someone virtually overnight. But finding a long-term sponsor is more complicated."

End of soccer fever

All this is news to Czech soccer. The national team's success over the past decade triggered euphoria, which had translated into solid backing until now.

"Soccer became a good marketing tool for appealing to big crowds," said former Pilsner Urquell spokesman Alexej Bechtin.

And sponsorship seemed rock-solid just a few months ago, as backers stood by their clubs throughout a major Gambrinus liga corruption scandal that surfaced in the spring.

Mobile telecommunication operator T-Mobile, a business partner of the CMFS, called for changes to the association's management. Although they still haven't happened, T-Mobile prolonged its partnership in summer 2005.

Coming into the season, Sparta seemingly had little reason to worry. Eurotel (now part of Telefónica O2) had been the club's main sponsor for six years and last year contributed about 30 million Kc to its coffers.

But soccer fever has cooled significantly since the World Cup, and sponsors are increasingly hesitant to commit.

Digital hope

The launch of digital TV broadcasting in the Czech Republic in the next few months could help buoy the interest of current sponsors, and help clubs lure new ones, analysts say, because advertising exposure would increase with improved picture quality.

"It always pays off when we can be visible on the screen," said Jaroslav Cerny´, spokesman for Skoda Auto, which sponsors Gambrinus liga runner-up Mladá Boleslav.

Sparta's Pribyl said that there is not yet reason to panic.

"Sparta and Czech football in general still hold significant business appeal," he insisted.

František Bouc can be reached at fbouc@praguepost.com


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