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Tennis Australia chief revenue officer Richard Heaselgrave has outlined ambitious plans to boost the Australian Open's sponsorship revenue, starting with the tournament's first-ever "virtual sponsorship assets" for Chinese audiences in 2018.
Speaking to Sponsorship News as TA ramps up preparations for next month's grand slam, Heaselgrave said the sport was thinking long-term about how to further increase its substantial sponsorship revenue.
TA recently revealed that sponsorship revenue was up 8.8% to $86.5 million in the 2016-17 financial year - an increase of nearly $50 million in the last four years.
Total revenue has surged in that time, from $186.4m in FY13 to more than $320m in 2017. Heaselgrave said a major reason for the strong growth was TA's decision to bring its broadcast content and TV production in-house three years ago, allowing it to capture more international revenue.
"Sponsorship has three strategic pillars. We have our local Australian partners, such as Coopers and Vegemite, who are really important for the event in terms of local colour, our international brands, and then China has become a really specific focus."
"In 2014 we went from a business that was primarily reliant on domestic revenue, in terms of broadcast and sponsorship, to now it would be an index of 3:1 overseas revenue to domestic," he said.
Heaselgrave said TA would further capitalise on Chinese growth in 2018, when it will roll out its first-ever "virtual sponsorship assets" in Chinese broadcasts. This represents an important strategic step in TA’s plan to market the tournament as the "Asia-Pacific Grand Slam" which began a decade ago.
"We'll have a raft of relatively large partnerships with Chinese brands that no one in Australia will ever see. That's based entirely off the move to bring content production in-house," he said.
"There's all this talk about military-grade signage technology, but it's actually really simple. We've developed our own virtual sponsorship assets on the court, and from there it's really straightforward to overlay it for the individual feed we send to our broadcasters in China."
New brands to link with the Open in 2018 will include Ganten, a Chinese mineral water brand which has signed a five-year deal, and broadcaster iQIYI. China's largest online travel agency, Ctrip, will also provide Australian Open tickets directly to Chinese fans for the first time.
TA has also opened two offices in China in recent years, which Heaselgrave said had made an important difference overthe last twelve months: "Because we've got people on the ground in these regional networks, we don't just have to rely on an agency, it's proven very appealing to brands."
More than 278 million hours of Australian Open coverage was broadcast to the Asia-Pacific region in 2017, with Chinese viewership up 84% to an estimated audience of 59 million.
Heaselgrave said that the Chinese advertising strategy would test the new broadcast technology, with a view to rolling it out across other lucrative markets in coming years.
"We're doing it for China this year but next year we can look at our US feed with ESPN, or Europe through Eurosport, or broader Asia with Fox. In theory, all of those local feeds can have local partners."
Heaselgrave said that, because TA controlled the sales process and the production, it also allowed it to offer top-tier sponsors such as Kia, ANZ and Rolex global exclusivity.
It’s understood that global exclusivity was a key reason behind Rolex's recent bumper extension with TA – a ten-year renewal from 2018, reported to be worth as much as $100 million across the duration of the contract.