Irish firms onto a winner at racing festivals

Businesses have realised the value of sponsoring horseracing events, writes Barry O'Halloran

The role that Irish horses, jockeys and trainers - not to mention punters - play in the Cheltenham National Hunt Festival is well known. But increasingly, Irish businesses are joining the annual pilgrimage to the Cotswolds and helping to bankroll the event.

The four-day festival kicks off on Tuesday with the Anglo Irish Bank Supreme Novices' Hurdle, Independent Newspapers and Smurfit-Kappa sponsoring the two following contests, while later in the week, Ryanair and developer Seán Mulryan's Ballymore Properties also support races.

Bookmakers Paddy Power and Boylesports have high-profile sponsorships there in November and December.

There's no need to explain why bookies sponsor races. There's a personal link for Ryanair, Smurfit and Ballymore. Ryanair boss Michael O'Leary owns War of Attrition, which won the Gold Cup, Cheltenham's most prestigious race last year, with the Mulryan-owned Forget the Past finishing in third. Smurfit chairman, Michael Smurfit, breeds and owns racehorses. It's a good way of getting noticed. Guinness operates the festival's tented village, a massive complex alongside the grandstands. As the horses swing for home, TV cameras often catch its huge black and white logo, which dominates the area, beaming it to millions of screens in homes, pubs and bookmakers' shops.

Guinness is not just connected with Cheltenham. It's acknowledged as Irish racing's biggest sponsor. It backs two high-profile contests here, the Punchestown Gold Cup, one of the most valuable prizes in the Irish National Hunt Festival at the Kildare venue, and through Budweiser, the Irish Derby, and its supporting races, at the Curragh.

Overall, it's a big financial commitment, although the company will not say how big. The derby prize fund alone is worth over €1 million, but Guinness does not contribute the entire amount.

In 2005, the last year for which figures were available, sponsors contributed almost €8 million to the €52 million paid out in prize money in Irish racing, over €100 in every €600.

They will contribute about half of the €4.3 million or so that Cheltenham will hand over in prize money next week. The total value of the races that the Irish companies are sponsoring comes to £950,000 (€1.4 million).

The most high-profile race of the five, the Smurfit-Kappa Champion Hurdle, carries a guaranteed fund of £360,000, or close to €530,000. This means that they are paying around €700,000 between them for the right to have their names attached to the races, while Smurfit is estimated to be paying €260,000 - €270,000. Cheltenham's director of sponsorship, Peter McNeile, says that the course does evaluate the impact of sponsorship in terms of pounds, shillings and pence, using benefits like newspaper and media coverage, other brand exposure and goodwill.

Cheltenham festival sponsors benefit from a five-month build up to the event. This means that their brands are mentioned in the racing pages, on TV and on all betting lists during that time.

Michael O'Leary must be pretty happy with his sponsorship. The Ryanair Chase, to give it its full title, is now just referred to as the "Ryanair", and other supporters are given similar treatment.

Sponsors' brands are highly visible on racecourses. ACC Bank supports the showpiece race on the last day of the Punchestown Festival, and as a consequence its logo is displayed in several places. It also gets space in the racecard, which is diligently studied by punters.

McNeile argues that the visibility and association perform important functions. "What sponsors are looking for is to be associated with a high-profile event, and to connect with the audience for that event," he says.

Connecting with the audience, or as Glanbia communications and sponsorship manager, Kieran O'Connor says, "the grassroots", is something that determines the food group's policy when it comes to choosing the events to support.

Its Gain Feeds business, for which the racing and bloodstock industries are an important market, has signed up to sponsor a race on the first day of the Punchestown Festival next month.

In deference to its own roots as the product of a merger between Avonmore and Waterford, Glanbia sponsors the Kilkenny and Waterford hurling teams, which has presumably left it with occasionally divided loyalties over the past few years.

O'Connor acknowledges that both sponsorships have been "great value".

Kilkenny has made it to five All-Ireland finals since 2001, winning three of them, while Waterford has made it to the same number of Munster finals, and gone to semi- and quarter-finals.

Kilkenny players and officials sport the Avonmore brand, while Waterford carries Yoplait Essence. O'Connor says these deals cost a "six-figure sum" in total, but the amount is not fixed, as the further a team progresses, the more money it gets.

Along with logos on jerseys, there is a quid pro quo for the company in the shape of players helping to promote its businesses. However, O'Connor stresses that as they are unpaid, amateur sportsmen, it does not put pressure on them. "But they are very good, very supportive," he says.

Glanbia also supports all levels of the Munster Schools' rugby championship. But while it backs whole competitions and specific teams, it avoids individuals.

"The one thing we don't do is individuals," O'Connor says. "There is a risk with that, something could go wrong with an individual, a team is different in that respect."

Most businesses have a strategy. Guinness spokeswoman Gráinne Mackin says that it has to be appropriate. Hence its uses the association between Cheltenham and the Irish, and the national drink, and the national game through its support for the All-Ireland hurling championship.

Sports sponsorship is a useful platform for product promotion. Glanbia is increasingly switching its focus from traditional dairy foods to those aimed at more health and nutrition-conscious consumers.

It uses players from the various codes to promote products like sports drinks, as there is an obvious link.

It can also promote direct sales. At the Curragh on Derby day, only Guinness products are available on draught in some of the bars, although competitors' brands are sold in bottles.

It will also sell close to 200,000 pints of the black stuff through its tented village at the Cheltenham racecourse.

On that basis, it looks like the brewer has already backed a winner for next week.