Tim Noonan

PUBLISHED : Sunday, 14 November, 2010, 12:00am
UPDATED : Sunday, 14 November, 2010, 12:00am

I won't bore you with numbers but suffice to say, the amount of sponsorship dollars in international sports is staggering. Multi, multi billions are spent annually, so much so that sponsorship money, for better or worse, is now the driving force behind sports. If you have been to a live event or watched one on TV recently, you are acutely aware corporate money is a necessary evil of sports today. But if you have been following global economic trends for the past few years then you also know the cash lifeblood has been seriously impaired by the financial meltdown.

'The days of companies saying we should get involved in this event because it is fun are thankfully gone,' says Giles Morgan, group head of sponsorship for HSBC Holdings.

HSBC is one of the few financial institutions that are actually expanding their sponsorship portfolio these days. 'The bank requires a business case in any investment they make including sports sponsorship,' says Morgan. 'It's not a simple case of doling out more budgets, this is a very prudent and old fashioned company.'

While HSBC may have exercised restraint over the years, a number of financial institutions clearly did not. The sight of Manchester United, arguably the most popular sports team in the world, wearing jerseys with an AIG logo prominently placed on front was a bit much for the US government to stomach, considering it had earmarked US$122 billion in taxpayer dollars to help AIG avoid a liquidity crisis. But a deal was a deal and AIG's contractual commitment to United ran through the conclusion of the 2009-10 season ensuring its toxic logo remained on the sporting giants' kit for all the world to see a good year and half after the bailout.

Sports and business are so intertwined these days that the notion of watching sports as an escape is almost impossible. Watching an NFL game is borderline sickening, there are more television commercials then there is action on the field and the flow of the game suffers greatly because of it. But when you have a multi-billion-dollar TV package, you have to pay the bills.

'I am a sports fan first and foremost,' says Morgan. 'So we try to understand the importance of the consumer. If you get in the way of their viewing experience then you become a negative, which kind of defeats the purpose. Good sponsors are people who know their customer base and know who are watching and it's not always the fault of the sponsors, sometimes rights holders are going for extra cash.'

Be that as it may, sponsors are also looking to maximise their exposure with their investment and where HSBC is looking for exposure these days is in golf and rugby. 'Our sponsorship portfolio is no longer designed for brand awareness, it's designed for client engagement,' says Morgan. 'Golf is the sport of the affluent and the aspirational.'

The affluent and the aspirational is code-speak for modern China and, not surprisingly, the most affluent golf tournament in Asia was played last week in Shanghai. The former world number one, Tiger Woods, the current number one, Lee Westwood, as well as number three Martin Kaymer and number four Phil Mickelson were all on hand at the WGC-HSBC Champions event featuring a field that would be the envy of any non-major golf tournament.

HSBC, billed as 'The World's Local Bank', is big on emerging markets and no market is emerging like China. Fuelling that emergence are the aforementioned affluent and the aspirational, who are largely first-generation golfers and as such are more attracted to the stars of the game then the game itself.

If you want to get them out to the golf course you need some sizzle and a few years back before the HSBC tourney was aligned with the WGC, they were allowed to pay appearance fees and lavished somewhere in the region of US$4 million on Tiger alone. Only one face could move golf in China and that was Tiger, so it made sense.

Hong Kong is far more affluent than aspirational so we never did get a Tiger appearance here, presumably because the Hong Kong Open, one of the oldest professional golf tournaments in Asia, did not need him. The title sponsor of the Hong Kong Open, UBS, felt the event sold itself and was happy to bring in some very good players, but not Tiger and his exorbitant fee.

Hong Kong is not an emerging market and the level of golfing sophistication and etiquette here proves that. Of course, the H in HSBC still stands for Hong Kong and it is the one place where HSBC is truly a local bank. As the title sponsorship deals on events like the Hong Kong Open and the Hong King Sevens expire soon, it seems like a natural fit for a company going heavy on golf and rugby.

'We have a different relationship with our customers in Hong Kong than anywhere else in the world,' says Morgan. 'We need to continue that engagement, particularly with the CEO office being based out of HK.'

And that is all I am going to get on that topic from the politically savvy Morgan.

The demographics here may not necessarily jibe for HSBC because Hong Kong is much more about maintenance than brand building. And admittedly its golf portfolio is pretty full with sponsorship of a number of tournaments. But if you see a chance, take it because Hong Kong is still much more aspirational than affluent when it comes to big-time international sports.