Hong Kong Sevens

Fears mount dropping events will have long-lasting impact and hurt tourism

PUBLISHED : Sunday, 30 August, 1998, 12:00am
UPDATED : Sunday, 30 August, 1998, 12:00am

THE region's sports calendar will be a little emptier this year, as sponsorship dollars dry up and the sporting associations cancel their less popular events.

The Badminton Grand Prix in Asia has been decimated by falling sponsorship, Hong Kong's Cricket Max tournament has been cancelled and sports from tennis to beach volleyball have struggled to gain the sponsorship needed to secure their tournaments.

Chairman of Hong Kong's sports development board John Hung said it was difficult to find new sponsors - or even keep old sponsors.

'It is much more difficult to get previous sponsors either to repeat their sponsorship of events or sustain the level of cash,' he said.

One of the sporting casualties of the recession had been the Cricket Max tournament. Although some blame the switch from cricket sixes to the 'max' format, Mr Hung said the two sponsors of the sixes tournament - Wharf Holdings and Cathay Pacific - had decided to drop the event.

Hong Kong has escaped the worst of the falling sponsorship in Asia, which has hit Indonesia, Thailand and Korea much harder.

Breck McCormack, managing director of International Management Group (IMG) Asia, said: 'Everywhere is tougher, though the worst hit areas for sponsorship are the worst hit economically.' The Badminton Asian Grand Prix is one of those that has taken a serious knock. The nine-year-old tournament had been growing steadily, adding more venues to the circuit each year until 1998. This year, the Korean, Thai and Vietnamese open tournaments in the circuits have been cancelled. The Indonesian one has been reduced to a four-star tournament from a five-star one, thanks to a 40 per cent drop in the prize money on offer.

IMG Jakarta managing director James White said he was glad he could still stage the event, despite getting less than half the sponsorship money the event had raised last year.

The Indonesian football league was not so lucky way. Half-way through the last season, the league was cancelled as its key sponsor dropped out. No balls are likely to be kicked this season either, as there is no replacement sponsor in sight.

The downturn comes as Hong Kong's sports community is struggling to find sponsors to replace the tobacco companies, who will be banned from advertising at sporting events from next year. This year, Hong Kong has already had to say goodbye to the Marlboro Open tennis championships and the Kent Beach Volleyball tournament.

Sports industry executives say even companies who were still seeing healthy profits were spending less, because their marketing budgets were linked to the revenue they were generating in each market.

Many people are concerned that dropping events will have a long-lasting impact. Hong Kong's status as the regional centre for sporting events will be threatened and tourism will suffer at a time when it desperately needs a boost. Mr Hung said events such as the dragonboat races and the rugby sevens brought in tourists. About half of the 37,000 crowd for the rugby sevens final were visitors, he said.

To make events a commercial success, the event organisers need to co-ordinate a wide range of bodies, from sports associations to television networks. Once an event is cancelled, finding a space for it on the sports calendar again and gaining the support of all the relevant bodies can be difficult.

Lincoln Venancio, group managing director of sports management company Spectrum, said: 'With the big events, it's very hard to put them back.

'It requires the addition of a lot of different elements.' Mr Hung said persuading corporations to back an event that had already been dropped once was difficult.

Many in the sports business say Asian companies were becoming more active sponsors of sporting events in recent years. Now, they say, those companies have dropped out of the game, leaving the limelight to a few key companies.

Those that do have the dollars are getting much more for their money - and appreciating a much higher profile as a result.

Some companies are using the downturn to increase their profile.

In Jakarta, Mr White said some companies, including Sanyo, Gatorade and Coca-Cola, had been prepared to throw the revenue-marketing budget equation out of the window to take advantage of the opportunities.

Coca-Cola already sponsors a wide range of sports events in the region, from junior sports training programmes to the Davis Cup in Korea among other events.

Credit Suisse First Boston also achieved something of a coup when it stepped in to replace Peregrine as sponsor of the Hong Kong Rugby Sevens.

Alan Smith, vice-chairman of CSFB Asia Pacific, said the move had proved very successful. The event helped to draw fund managers around the region to a CSFB conference held in the preceding few days. Not only were they able to sell conference places more easily, but speakers were more amenable to the idea.