Feeds:
Posts
Comments

Archive for the ‘Advertisement’ Category

globo_respeite

“Football is run by Globo; the Federation is just a meeting room” – Alex

.
Hundreds of tiny cuts. Day in, day out. Took me some years to notice, partly due to innocence, partly due to my inability to pick up the finer strokes and the “in-between-the-lines” in a still to me very foreign language.

From those early stages of ignorance, I progressed to denial, considering a wide, orchestrated campaign a preposterous idea, driven by the passion that blinds the best of supporters of any club at any given time.

Patterns became more visible over time, and so did my knowledge of the society in which I find myself inserted. These and other things converted to a different insight, laying the foundation for what I am about to address: the multifaceted and deliberate attacks on the Sociedade Esportiva Palmeiras.

These attacks are partly rooted in decade-long feuds of both political and social order; the Italian origin of the club; the “enemy-of-the-state” sentiment flourishing during WWII, culminating in the forced name change from Palestra Italia to Palmeiras; the biased Superior Tribunal of Sports, based in Rio de Janeiro, always catering for the interests of carioca teams; the rotten to the bone Brazilian Football Federation (CBF); the equally pathetic Paulista Football Federation… These and other factors directly and indirectly contribute to direct and indirect attacks on Palmeiras, exemplified on numerous occasions over the years, as exposed here at AP.

Yet, we are still to address Palmeiras’ main foe, the true hydra. The Globo television network and its affiliates.

The power of Rede Globo is unrivalled, and on many fronts. For decades, this giant of the Brazilian media has called the shots concerning the Brazilian championship and the National Squad, a puppet master of sorts behind the CBF. The Network assigns time slots for games without regard to stadium attendance, only concerned about securing maximum revenues from their primary cash cows, the telenovelas. Weekday games finish close to midnight, spectators sometime left without public transport to get home by.

The Network has its darlings, Flamengo and Corinthians. “The Clubs of the People”. Little efforts sparred to award advantages to these two in the pursuit of a “Barcelona vs. Real Madrid of the Americas” setting. Flamengo and Corinthians receive about the double in broadcasting rights compared to other major clubs, including Palmeiras, without any numbers to justify the distortion. They get more airtime, without television ratings to back up the decision. The two frequently enjoy positive plot twists: a Flamengo draw is an “increased undefeated streak” while a Palmeiras draw is a “narrow escape from embarrassing defeat”. Would you believe the Globo network even sponsors the fabrication of banners and flags for the organised supporter groups of Flamengo and Corinthians?
.
gambá_bandeirão_merged
.
The inflated broadcasting revenues enjoyed by the aforementioned darlings roughly correspond to what Palmeiras receive through the club’s Master Sponsorship agreement with Crefisa/FAM. Indeed an important source of revenue, albeit only making up some 16% of Palmeiras’ total inflow. The club is however frequently criticized in the media for “having accepted being hostage to the capital” and dependent on the whims of a sponsor.

Last year, after lengthy negotiations, Palmeiras opted for selling their 2019-2024 cable TV transmission rights to newcomers Esporte Interativo, part of the Turner Broadcasting Company, the television arm of Time Warner. This has generated two immediate effects: for the Palmeiras games that Globo would retain the right to broadcast (open air and PPV), the Network has offered Palmeiras a deal 20% below that of previous year. Palmeiras have so far refused; if stalemate prevails, Globo will be without broadcasting rights to 1/10 of games in the 2019 Brazilian championship.

More seriously, and as former Globo employee Luiz Ademar confirmed a few weeks back, the Network has been instructing their sports journalists to trash-talk Palmeiras. And not only Palmeiras, but any team that signs with Esporte Interativo.

Palmeiras’ exposure has diminished on cable TV and even on the radio, with the CBN and Globo radio stations sometimes opting out from a transmission that seemed like a no-brainer.

Add to this the absurdities frequently seen on social media. I refuse to linger on this topic, but will provide you with one example: “How many goals will Teo Gutiérres score against Palmeiras?” is the question posed by Globo affiliate SporTV. One would think the Network would express support for a Brazilian representative in the Libertadores Cup. Think again.
.
teo_provocação.
Isolated, the aforementioned examples are easily brushed aside. Compiled, they draw a different picture. A picture also subject to healthy scepticism, were it not for its perpetration over time. And its effect on the referees.

No, there is no orchestrated conspiracy among referees to benefit certain teams and make life harder for others. No need to: everyone knows what happens to the career of a referee who makes a crucial mistake or two against Flamengo or Corinthians. Referees in Brazil never talk, unless they have committed such a mistake. A few weeks back we had one actually crying to the press outside the locker rooms.

No wonder attendance is dropping all over the scale. Supporters in general are tired of the bias, the manipulation and the outright lies. Palmeiras supporters in particular, who last week launched a twitter campaign that within hours reached the worldwide trending topics with the hashtag “GloboRespeiteOPalmeiras”.

Unhappy costumers is normally not good for business. In this particular context, unhappy costumers might hurt the brands associating themselves with Rede Globo in general and with football in particular. Food for thought.

Scoppia che la vittoria è nostra!

Advertisements

Read Full Post »

SEP_PUMA

PUMA Brazil president Fabio Espejo and Palmeiras president Marcelo Gagliotti officialising partnership (photo credit: Fábio Menotti/Ag.Palmeiras)

.
As you learnt from here a little over a month ago, PUMA will be Palmeiras’ provider of sporting equipment as of 2019. The contract runs over three years and was officially announced today. Between fixed and royalty-based revenues, Palmeiras expect to receive an approximate R$ 25 million (US$ 7,5 million) yearly from the deal, which is a 25% increase compared to the current Adidas partnership.

In addition to increased revenues, a few other aspects of the PUMA partnership stand out, such as:

# Kits ready available during the Brazilian pre-season (not as now, only at the start of the Brazilian championship in mid-April);
# Palmeiras the only Brazilian club sponsored by PUMA during the length of the contract;
# A “Team Palmeiras” set up at PUMA, attending exclusively to the club’s needs;
# Palmeiras gear available at PUMA stores worldwide.

A big, hearty welcome to PUMA. Rest assured you will never encounter a more faithful consumer than the Palmeiras supporter. Treat us right, and you’re in for quite a ride!

Scoppia che la vittoria è nostra!

Read Full Post »

Although still in what almost could be considered pre-season (were it not for the Libertadores Cup), things are starting to get serious. Palmeiras already know what awaits in the quarter-finals of the São Paulo Championship: Novorizontino, who yesterday beat Santos 2-1 to secure their spot.

Today’s penultimate game for Palmeiras in the group stage of the Paulistão has a special flavour: the 100th game at the Allianz Parque, and against arch-enemy São Paulo FC. 32 thousand tickets had been sold by yesterday evening. If Roger Machado wants some peace and tranquillity, he’d better make sure Palmeiras turn out a convincing performance tonight, erasing the perception of a stale and uninterested squad of last few rounds.

— ooo —

A brief update on players currently in the Medical department:

Edu Dracena has not yet made his debut in 2018. On a specially tailored programme in order to reduce muscular injuries throughout the season, the 36-year-old felt discomfort to the hip last week during training. With nothing but a minor inflammation to a tendon, Dracena should be at Roger’ disposal by next week.

Deyverson suffered an almost identical injury to that of Neymar, in the fifth metatarsal of the right foot, and underwent surgery. The forward is in his sixth week of recovery, with another expected two weeks before ready to initiate physical reconditioning on the pitch.

Diogo Barbosa seriously twisted his ankle in mid-January, during a pre-season friendly game. The left-defender is clinically cured, but not yet ready to play, as he lost considerable muscle mass due to the period of immobilization. In the coming days he’ll start training on the pitch.

Mayke twisted his right ankle during a training session last week, suffering a ligament injury. He will not need surgery, but with recovery expected to take between four to six weeks, he has been cut from the São Paulo Championship roster.

Jean went under the knife on 11 January, in an effort to minimize effects of wear and tear to the cartilage of his right knee. He is about to complete two months of treatment, with the recovery period ranging from three to four months, effectively keeping him out of the Paulistão and also (at least the first stage of) the Libertadores Cup.

Artur operated his right ankle on 16 February. The young forward initiated physiotherapy this week and should be recovered in little more than a month.

— ooo —

While on the topic of players: forward Dudu has extended his contract with another two years, now valid until end of 2022. Earlier this year, the 26-year-old turned down a very lucrative offer from China. With the extension cames a salary adjustment, as well as a bumped up early termination fee.

— ooo —

A whopping six (6) Palmeiras players have been called up for the Brazilian U16 squad to compete in the upcoming Montaigu tournament in France. In addition, striker Fabrício was called up for the U17 squad, playing two friendlies against England at the end of the month.

— ooo —

Rounding things off with a sight for sore eyes: Phil Collins and Foo Fighters recently did sold-out gigs at the Allianz Parque and, of course, received Palmeiras jerseys up front. Just one more reason for becoming a superstar.

Scoppia che la vittoria è nostra!
.

 

Read Full Post »

It was a closer call than one would perhaps imagine, Topper in it until the very end, but PUMA stepped up their offer and, as expected, are Palmeiras’ new provider of kits as of 2019. The deal was sealed yesterday night and is valid for a so far undisclosed number of seasons. With this, in December, Palmeiras’ twelve-year-long partnership with Adidas comes to an end.

In regard to the current arrangement with Adidas, the PUMA deal entails a 20% raise in fixed revenues, from roughly R$ 10 million to R$ 12 million (US$ 3,1 million to US$ 3,7 million), in addition to royalties based on sales and performance bonuses. In Brazil, PUMA will exclusively sponsor S.E. Palmeiras. All dealings regarding the partnership, from development to distribution, has PUMA Brazil as counterpart, with the company HQ in Germany’s approval.

PUMA came close in 2014, but Palmeiras opted to renew with Adidas, in spite of the partnership showing clear signals of fatigue. Today’s breaking news are certain to excite most Palmeiras supporters, while simultaneously installing a bit of performance anxiety: after all, PUMA are known for their tight fits. Heading to the gym in 3… 2… 1…
.
puma_green

Read Full Post »

Adidas has been Palmeiras’ provider for twelve years, but the continuation of the relationship seems to be hanging by a thread. The reasons are multiple. Several of more recent models put out by the German giant have not been particularly well received by supporters. The poor international visibility, and a business model whereby Palmeiras receive a fixed annual sum and not a percentage according to sales (mind you Palmeiras are Adidas’ fifth highest selling football club brand in the world) are other factors.
.
puma_adidas.
Rumours regarding a swap have been frequent for some years, but this time it seems more plausible than ever. Two other offers are on the table: Brazilian brand Topper – with teams like Botafogo and Atlético Mineiro in their portfolio – and PUMA.

Reportedly, Topper has presented the financially most lucrative bid of the three. PUMA is somewhere in the middle, with compatriot Adidas trailing behind. Now, of course, there is much more than numbers to consider when assessing these offers: marketing strategy, distribution channels and logistics, and consumer awareness are just a few of the variables.

PUMA have two things going for them in particular. They offer an exclusivity clause, meaning they would not sponsor any other Brazilian football team for as long as they are partnering with Palmeiras. They also promise (although this should be treated with a healthy dose of reality check) they will give Palmeiras their “global brand” status, levelling with the likes of AC Milan and Olympique de Marseille in 2019.

PUMA are also, indisputably, the brand of choice among Palmeiras supporters.

My sources are particularly vague on this one, not much is leaking from inside the club, which is good. That being said: I’d put my money on the feline.

Read Full Post »

With roughly US$ 60 billion being pumped into sports through sponsorship deals every year, one would assume the average business model to be solid and well defined, securing that companies benefit from their investments. Well, think again. Research on the topic is surprisingly scarce and the main findings of the studies that do exist, surprising by their own merit.

Do sponsorship deals increase brand visibility and value? Sales? Company net worth? How could these and other indicators be better studied, fueling more qualified discussion on the topic?

Below, Douglas Monaco gives us his take on a highly relevant article, “Does football sponsorship improve company performance?”, inserting it into the context of the current (for Brazilian standards) controversial Palmeiras x Crefisa/FAM partnership. Enjoy!

  — ooo —

Improving the discussions on sponsorship of football clubs

  1. Introduction

In the last weeks, the relationship between Palmeiras and Crefisa/FAM has generated a new wave of media attention.

On the one hand, people have called for financial fair play, claiming that Palmeiras’ spending on players has to be curbed to avoid an otherwise uneven, unbalanced situation in which the tournaments will be tilted towards the club, artificially increasing the club’s odds of winning.

On the other hand, there is extensive coverage of the alleged rewriting of some parts of the partnership contract. According to repercussions in general, the changes would have been triggered by the Brazilian IRS (Internal Revenue Service) investigation of how Crefisa/FAM was accounting for the amounts paid in signing of players.
.
crefisa&sep.
The fact is that since its beginning in January 2015, the partnership has been a customary subject in the TV sports news and internet sports outlets. The comments are purportedly making a technical assessment of football clubs’ sponsorship as a theme.

The truth though is that these discussions have generated much fuss, but nothing practical. In the words of the late and illustrious Palmeiras’ supporter Joelmir Betting, “much heat and no light”, an expression that used to pop up in his always clarifying chronicles.

Propelled by the last wave of comments, this post will bring to the discussion something unusual so far: results from a peer reviewed paper published in a scientific journal specialized in sports management. The paper was published in December 2016 and its results – rather counter-intuitive – are based on a 6-year analysis of 78 companies sponsoring clubs in 7 (seven) of the major European leagues.

The objective of the study has been to measure the effectiveness of sponsorship to the sponsor, i.e. does sponsoring a football club make the sponsor more successful in relation to key indicators like sales and market capitalization?

The goal of the post though is not so much to emphasize the results, but to suggest an approach to discussing sponsorship in football: analytical rigour, conceptual formalism and relentless objectivity. By improving the analyses, conclusions about the subject will at once be more reliable and more useful.

  1. Results experienced by 78 European sponsors between 2006 and 2012

2.1 Context of the study

There are many reasons to study the effectiveness of sports sponsorship to the sponsoring company.

First of all, according to the Handbook on the Economics of Professional Football, sports sponsorship as a business is estimated to have drawn in 62 billion dollars in investments during 2017, with football assumed to have received sizable parts of it.

Beyond this quantitative aspect though, the notoriety of the phenomenon in the whole world seems to be only increasing. Brands – well-known as well as up and coming – are seen in shirts of leagues in a variety of sports, with football as a front runner in the context.

Given this combination of economic size and prominence, the question is unavoidable: does such a cost draining, prominent activity actually generate value for those investing in it? Do sponsors increase sales, become more profitable, do they increase their wealth due to their investments in sponsorship?

One basic difficulty in studying the phenomenon is to reach a consensus in defining sponsorship: is sponsorship “paying to be seen”? should it allow the investor a say in sponsored entity’s affairs?

Studies about the sponsorship seem to follow a line of applying surveys to capture public opinion’s perception of sponsor, detect consumption intentions, mapping the repercussions of brand visibility both in conventional as well as in social media.

The study reviewed in this post adopts the usual “pay for visibility” concept. But it takes a different method: instead of the surveys, it attempts to quantitatively measure the impact of amounts paid by sponsors on their result-variables, things observable in the sponsors’ balance sheets.

2.2 Results of the study

The main conclusion of the study is: for the six years analyzed, there is no evidence that investing in the sponsorship of football clubs brings measurable benefits to the sponsor’s balance sheet.

And this finding is verified for practically all countries analyzed by the study. The sampled 78 companies are present in clubs of England, Spain, France, Italy, Scotland, Netherlands and Turkey, seven of the main European leagues.

The study uses regression analysis to measure causality between invested value and performance of the company. For all tests made, the result is that there is simply no causation, i.e. companies that invest in sponsorship don’t achieve better economic outcomes than those that don’t invest in sponsorship.

The variables of the model are quite straightforward: total amount invested in each year versus result-variables in the following year. The result-variables are of two kinds: sales income and market capitalization.

The choice for sales-income aims at reflecting the effect of sponsorship over the sponsor business primarily in the next year. The choice for market capitalization – share price multiplied by the number of shares in circulation – captures the expectation that the capital market has about the general profitability of the company also for the future years, so measuring the impact of the whole enterprise strategy, inclusive the investment in sponsorship.

Results relative to Sales

The regression analysis used – considered a powerful tool to test this type of quantitative relationship between variables – makes important methodological adaptations aiming at vulnerabilities intrinsic of the situation, e.g. the “chicken and egg problem”: are companies that sell much more prone to sponsoring? Or companies that sponsor end up selling more?

In spite of allowing for this limitation, in its almost totality, the results indicate that there is no impact of sponsorship over sales.

The only admissible exception is the league as a differentiator: the French league presented a slight impact on sales. If this aspect shows to be replicable, a stream of research may be indicated.

Another aspect analyzed by the report was how “acting for the first time as a sponsor” could make the company more likely to benefit from the investments. Unfortunately, here too, results don’t show any significant impact on sales.

Results relative to Market Capitalization

For this variable, the results are uniform in all circumstances: investing in sponsorship has decreased the market capitalization of the studied sponsors.

Market capitalization is a long-term indicator that reflects the average expectations of the capital market investors. Capitalization takes into consideration the expected net cash flows, discounted by the adequate rate, when income and payments are estimated, inclusive of the payments to sponsorship.

Losses in market capitalization translate into actual reduction in a company’s net worth, i.e. the loss in market value has to generate an entry – debit and credit – in the books that will be reflected in the company’s balance sheet.

The study does not give details of which countries show more pronounced losses, neither which sectors of the economy the sponsors belong to. Still, the correlation is deprecating enough to prompt a reevaluation of the strategy.

Other results

The study also controls for the global economic crisis of 2008 – to avoid the crisis being disguised into the lack of impact by sponsorship.

Another important point was to test which characteristics make a company more likely to sponsor: size and type of ownership are the factors more associated in the study.

Bigger companies and companies individually controlled seem to be more prone to engage in a sponsorship contract. Companies from the financial sector, those of more pulverized ownership and government companies are less likely to.

The study cogitates that the utility function of the sponsor owner seems to benefit more from sponsoring than any commercial benefit the company may derive from the contract.

The most unexpected statement made by the study is that “football sponsoring is more charity than business”.

2.3 Comments about the results

For many reasons, the results of this study have to be considered as surprising, to say the least.

First of all, the global investment in sponsorship is huge. So, there seems to be a strong contradiction as how can so much investment be made into something that doesn’t produce return?

The geographical and contextual reach of the study accentuates the surprise nature of the results.

In “contradiction to the contradiction”, the Brazilian case seems, to some extent, to confirm the study as in late years, Brazilian clubs have faced more difficulty in recruiting new sponsors than in the past. The cases of “clean jerseys” and one-off sponsorships have been more common.

The exception in Brazil really appears to be Crefisa/FAM whose amounts invested have only grown since January 2015. Beyond the increase in value, the scope of the investments has also varied – not only the brand is shown in the commercial properties of the club, but football costs have been directly covered by the company, e.g. signings and paychecks of certain players.

Not only have the investments grown: the general impression is that the visibility of Crefisa/FAM has been catapulted to record heights – much like Parmalat’s in the 90s. In addition, the sponsor’s performance data seem to indicate strong practical impact of the partnership. According to internet information published[1] at the beginning of 2017, the Crefisa/FAM group enjoyed a 30% increase in the enrollment of new students, coupled with the acquisition of 400,000 square meters of land in the eastern zone of the city of São Paulo, where a new campus will be built.

All this strengthen the impression that the partnership between Palmeiras and Crefisa/FAM could be an outstanding exception to the 78 companies study; with the obvious caveat that further verification regarding sales and net worth of the sponsor is necessary in order to affirm the exception.

  1. Final comments

Though not conclusive, the results reviewed in this article offer important insights into understanding sponsorship as a phenomenon.

For the time being, despite the huge investments made in sport sponsorship worldwide, one quantitative study covering a highly significant sample of European leagues indicates that sponsoring a football club does not constitute good business strategy.

At least not in a conventional way, i.e. paying a fee, inserting your brand and expecting your profits or at least your sales to grow as a result.

Counter-examples to the reviewed study would have to be researched.

But cases like the Palmeiras x Parmalat in the 1990s and Palmeiras x Crefisa/FAM now suggest that to derive tangible benefits, the level of investment must be above average and that apart from exhibiting the brand in the club’s commercial properties, the sponsor must somehow share in the business of club’s football department, vis a vis the co-management experiment with Parmalat and the signing of players by Crefisa/FAM currently taking place at Palmeiras.

Another aspect that the 78 companies study highlights is the “satisfying the utility function of the sponsor’s owner” as the primary goal of conventional sponsorship.

Interestingly, the occasional strengthening of this hypothesis – by further studies – could prove right the “benefactor” accusation that has victimized Palmeiras in the Crefisa/FAM partnership. Maybe, the so much criticized arrangement is actually a model to be followed instead of the “wrong example” to be avoided.

Anyway, what the remarks above suggest is that we’re still at an incipient stage in the scientific knowledge about sponsorship in sports/football.

Further studies will prove these and or other remarks right or wrong. Whatever the final results, what matters is that they be reached with appropriate methodology in a way that lends legitimacy and credibility to the output.

— — —

Reviewed article

“Does football sponsorship improve company performance?”

European Sport Management Quarterly, 2016. Vol 16, no. 2, pp. 129-147. Published by Routledge, Taylor and Francis Group. Written by Iuliia Naidenova, Petr Parshakov and Alexey Chmykhov; all from the Laboratory of Intangible-driven Economy, National Research University Higher School of Economics, Perm, Russia

[1] http://www.1news.com.br/noticia/5629/futebol-brasileiro/leila-pereira-comemora-sucesso-em-parceria-com-palmeiras-confira-os-lucros-das-empresas-07022017

Read Full Post »

SOS_tree_dayPalmeiras stirred supporter’s curiosity this Thursday morning. On the club’s social networks, the profile picture was changed to a “P” symbol with practically no green in it.
.
A few hours later, the motif was revealed: in partnership with the non-governmental organisation SOS Mata Atlântica, Palmeiras promoted Brazil’s “Day of the Tree” by illustrating how much of the Atlantic Forest that used to cover Brazil’s coastline – a whopping 90% – has disappeared. Palmeiras call upon all of us to protect what remains of this precious biodiversity.

Want to contribute? Click here!

Read Full Post »

Older Posts »

%d bloggers like this: