Sharma, Smith & Brodie: It's make-or-break time for our largest brand

1 comment
The All Black brand enjoys a loyal following among Kiwis of all ages, including Dillon Adrole of Wanganui. Photo / Tracey Grant
The All Black brand enjoys a loyal following among Kiwis of all ages, including Dillon Adrole of Wanganui. Photo / Tracey Grant

Cup result will dictate All Blacks' future earning power, write Rahul Sharma, Julian Smith and Rod Brodie

With the Rugby World Cup just over a month away, the pressure on the All Blacks to win is building towards its four-yearly climax. As the tournament's perennial favourites and as hosts, the All Black brand is set to receive significant exposure. So how will this exposure impact the value of our largest brand?

And what happens if we don't win?

The All Black brand has played a significant role in representing New Zealand - from the haka to the colour black and establishing the nation's emblem of the Silver Fern on the global stage.

The fact that it still enjoys a loyal following among New Zealanders is a reflection of the brand's ability to uphold a set of values that Kiwis are proud to stand behind.

But it's only in the past 25 years that the All Blacks have evolved from our most well-known representative team into a truly global brand juggernaut. So what are the factors behind this transformation and what does the future hold?

Throughout the world, and across different sports codes, the rise of professionalism, coupled with the commercialisation of recreation, has changed the way in which sports are perceived and consumed.

As the balance shifts from building a successful team to commercial profit targets, the adaptation of business principles becomes crucial to the management of sports teams and the brands that they build.

When you look into the value of the All Blacks or any other major sports team through a commercial lens, the key to the brand's value is its ability to deliver repeated success.

This leads directly to creating a legion of loyal supporters - committed to the brand and its cause.

Look at the supporters' base of the most successful sports brands and it's the Manchester Uniteds, New York Yankees and Tiger Woods that lead the way in terms of attracting an audience and therefore the television rights and sponsors' dollar.

In the case of Manchester United, you are talking about the biggest brand in world football, the name and brand valued at about US$285 million ($326 million), and the most successful team in Premier League history. Estimated to be valued at US$1.83 billion all up, the team has lucrative deals with Aon (£23 million, or $43 million) and Nike (£20 million) annually.

While the brand is undoubtedly based on the team's sustained success across Europe, of particular relevance is the way the brand has used this success to endear itself across the Asian continent - home to half the team's core sponsorship base.

Like Manchester United, the All Black brand has been built on a legacy of greatness established by those who have worn it previously. It is the All Blacks' sustained winning record that drew global giant adidas into its initial multimillion-dollar apparel contract in 1999, and then extended in 2008 to 2019 for approximately $20 million - making it one of its longest sponsorship deals.

Starting with adidas' investment in the brand and taking in the brand's additional sponsorship arrangements, broadcast rights contracts, gate takings, merchandise sales and player values, a conservative estimate of the All Black brand value is between $190 million and $220 million.

This puts the All Blacks in the same league as the likes of Chelsea FC, Juventus and the Boston Red Sox. But the question remains, how will the brand fare if the team loses on home soil or wins the World Cup again at home?

The Indian cricket team provides a captivating case, as it has only recently established itself at the top of cricket's pecking order.

Cricket enjoys a religious devotion in India, but it's the team's recent success at the highest level that has catapulted it from Bollywood's poor cousin to the marketing vehicle of choice.

Victory for South Africa or Australia this year will give either team considerable clout in terms of claiming their place as the greatest rugby nation and subsequently the strongest rugby brand.

While the All Black brand will be protected by adidas' 10-year deal, its earning power will be dented by a loss and there is a real chance that All Black brand will follow a similar path to Brazil's football team.

Brazil is the most successful team in Fifa World Cup history, having amassed five wins since the tournament's inception in 1930. Yet, the team's inability to perform and feature at the final stages of recent World Cups has seen a decrease in the brand's equity - as evidenced by Nike's latest sponsorship deals which sees the company spending considerably more on the brands of Manchester United, Barcelona and even the French national team.

The bottom line of the matter is that behind every symbolic and/or experiential offering of any brand, functional performance is the basic requirement. Competitions, especially high stake ones, are the best ways of showcasing a brand's ability to perform. So the Rugby World Cup will be the biggest test for the All Blacks since 1987.

The next stage in the evolution of the All Black brand lies in its ability to attract global companies to enter its stable of sponsors. A victory this year will cement the All Black brand in the highest echelons of the world's sporting brands.

A loss could see the All Blacks enter the forlorn territory of sporting bridesmaids like Arsenal, The Mets and The Baggy Green.

Rahul Sharma and Julian Smith are brand strategists for BRR Ltd and Professor Rod Brodie is head of the marketing department at the University of Auckland Business School.

- NZ Herald

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf03 at 19 Dec 2014 11:42:16 Processing Time: 431ms