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Supporter of the underdog with a sporting social responsibility; Howard Wright meets the chief executive of Sportingbet, who is intent on doing the right thing despite his company suffering recent losses.

ANYONE skimming the surface of Sportingbet's sponsorship portfolio for explanations could be forgiven for thinking the online betting operator's chief executive Andrew McIver is the ultimate champion of the underdog.

After all, the company's support since he took over the role in 2006, after five years as finance director, has been channelled towards a British woman tennis player, a football club threatened by relegation, some moderate to poor ex-racehorses and even horseracing itself.

McIver cannot see the underdog. "I hadn't thought of it like that," he says, before explaining that driving business and providing a heritage link are the biggest factors in deciding sponsorship and marketing spend.

Backing the fledgling junior tennis career of Heather Watson arose out of McIver's ambition to take the Sportingbet brand into areas that matter for the business, where football accounts for 63 per cent of turnover and UK and Australian horseracing 12 per cent. Tennis is third best at ten per cent.

He explains: "Football and horseracing are accessible, but tennis is inaccessible, because the authorities don't seem to want to partner with betting operators.

"However, we came across Heather because she's from Guernsey, where our European operation is based. It transpired that she got about pounds 3,000 a year from the LTA to compete.

"I thought supporting her would be good for the business, and also we were doing the right thing for someone who could be a great British athlete, but who was turning up at tournaments having effectively gone Ryanair via Delhi, with her mother.

"We supported her for three seasons, until she turned 18. She's done phenomenally well."

Football sponsorship was targeted in a bid to grow the size of Sportingbet's UK market which, at the time a deal was done with Wolverhampton Wanderers two years ago, represented four per cent of turnover.

"We could see that the rest of Europe was going to regulate on gambling, but we didn't know what form it would take," McIver says. "But we understood UK regulation, so decided it was time to increase our UK business.

"At the time, sponsorship of football clubs had become more accessible, and Wolves looked like they could be promoted from the Championship.

"We thought it was a gamble worth taking, because we'd get more publicity if they were in the promotion race. Also because they are a 'heritage' club with a strong fan base disproportionate to their relative recent success."

The gamble paid off with promotion and even this season's fight against relegation has its upside, McIver admits.

"It's good for us in terms of exposure, even if it means I spend more time sitting on the edge of the sofa. We hope they do stay up, though we accepted last year, when we extended the deal to four years, that they could go back to the Championship.

"We believe sponsorship is a partnership and it takes time to build an association."

McIver's push to grow the UK side of Sportingbet's horseracing business brought him into contact with Heros, the Grace Muir-created charity that retrains and re-homes ex-racehorses, usually from the lowest pedestal in the sport.

"We fundamentally agreed that although horseracing was not a growing betting product, to be a serious bookmaker in the UK you have to be associated with the sport, and we had to get our brand out there," he says.

"As a company we are committed to social responsibility and try to put money back into a sport wherever we can. Heather Watson was part of that commitment and Heros is another.

"I thought that, in an economic recession, looking after retired racehorses was going to become a mounting problem and it was the right thing for us as a bookmaker, earning our living from horseracing, to do.

"We haven't a huge budget, but I think it's beholden to us to give money back where we can.

"In the case of Heros, Grace does a fantastic job, 26 hours a day and you're swept along in her enthusiasm."

At the other end of the horseracing spectrum, Sportingbet's forthcoming debut as sponsor of the Queen Mother Champion Chase at the Cheltenham Festival, after entering at a lower level, goes back to the 'heritage' factor that featured in the Wolves deal.

"We are a sporting bookmaker, and want to portray the image of sporting events as straight, fair, competitive and passionate," McIver says. "In terms of sponsorship deals, we try to look for things that tie in with that.

"Bearing in mind we have a limited budget, we've looked at racecourses that we felt portrayed that image and focused on Windsor, York, Newbury, Newmarket and Cheltenham - the heritage courses that had passion, where we could also be seen to be a bigger fish.

"We established our credentials at Cheltenham and when the Champion Chase became available it seemed like a natural progression for us.

"We get a lot less exposure because, for the money, we could sponsor 50 smaller races, but we felt that wouldn't fulfil the passion and the heritage aspect. It would just become a media buy."

As for wider support of British horseracing, Sportingbet now stands out for voluntarily paying levy on its gross profits.

As with supporting Heros, McIver puts this decision into the category of "a good thing", after he was approached by the Racehorse Owners Association to sponsor its annual awards, but was told the organisation had a problem with Sportingbet not paying levy.

"I can't take all the credit, because I was feeling my way and the UK was a new market," McIver admits. "It was a good thing to be associated with the ROA awards, as we wanted to be taken seriously and not regarded as a junk Johnny Come Lately.

"I hadn't given the levy any thought, but it became obvious it was the right thing to pay. We were making money from racing and it was only fair, particularly in an industry that relies on the levy. I feel less guilty about football, which has money pouring in from other sources."

BRITISH women's tennis, Wolves, Heros, British horseracing: even Sportingbet's share price, which has almost halved over the past 12 months and starts trading today at 46.94p, could fit into the 'underdog' category. McIver has a different take on the situation.

"We have four big markets - Australia, Turkey, Greece and Spain, each one accounting for about 20 per cent," he explains.

"Two of the four, Greece and Spain, are currently unregulated but looking to put regulation in place. The stock market is concerned about what form that regulation will take and what it would do for our profitability.

"In the short term, our profitability would definitely go down, because our intention is to apply for a licence in Greece and Spain and, if we are successful, we will have to pay tax which will start on our existing turnover and profits. So there'll be an initial hit.

"If you look at Australia, where the law changed in 2008 and we had to pay tax and increase our advertising, we have got back to where we started in terms of profit within two years.

"But our shareholders have applied the Australian model to Greece and Spain, thinking the profits will go down and take some time to come back. Therefore, they reckon the company is worth less. And because we don't know what form the regulation will take, a further discount for uncertainty has been added."

While Greece and Spain remain problem areas with their futures unresolved and any liberalisation in the US, from where Sportingbet escaped with badly burnt fingers but a clean slate, likely to be cordoned off for home involvement, McIver is working his way through the BRIC sequence.

Sportingbet have entered Brazil, with its emphasis on football, and Russia, where a partnership arrangement is founded on a different economic cycle from Europe. Tackling India and China, which are "more difficult to understand," is not an immediate priority.

GENERALLY, though, McIver believes growth will come, partly through economic recovery and partly through three natural forces that he believes work in Sportingbet's favour.

"Firstly, there is the demographic factor," he explains. "For everyone who falls off the 75-year-old end of the spectrum, I get an 18-year-old, who is more computer friendly, though that's not be as marked as it used to be.

"Secondly, we need broadband penetration for our business and, although it's 30-35 per cent in Europe, it's increasing.

"Thirdly, people's confidence to transact financially over the internet has increased markedly over the last five years.

"They are all to our advantage, which is encouraging."

CAPTION(S):

Heather Watson: Sportingbet backed the 2009 US Open junior champion for three seasons Generous gesture: Andrew McIver (right) presents a cheque to Retraining of Racehorses chairman Andrew Parker Bowles
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Title Annotation:Sports
Publication:The Racing Post (London, England)
Geographic Code:4EUUK
Date:Feb 21, 2011
Words:1466
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