Under starter's orders as sponsorship race hots up

Media&Marketing: It's known as the sport of kings but these days horse racing is an everyday event at one of the 27 racecourses across Ireland. The sport is financed by owners, the betting industry, the taxpayer and a lot of sponsorship.

Banner races such as the Irish Derby at the Curragh have attracted premium sponsors like Budweiser, although the beer brand has now departed the scene.

But it's a tougher sell to sign up sponsors at some of the smaller racecourses, with Laytown earning a meagre €3,000 in sponsorship for its single race meeting in 2006 and Downpatrick securing just €9,000 in sponsorship for its 10 race meetings in 2006.

Three years ago, Horse Racing Ireland (HRI) decided to step up its marketing of sponsorship opportunities in the sport. The organisation spends €60,000 each autumn advertising the merits of racing sponsorship.

The HRI's increased marketing focus coincided with a multimillion-euro investment plan established for the country's racetracks. The most notable upgrade in 2007 was at Dundalk, which reopened in August with a new all-weather track and 25 days of racing in its calendar.

Since 2004, commercial sponsorship revenue for horse racing has increased from €5 million to €8 million, according to Michael O'Rourke, chief executive of HRI. The Curragh attracts most sponsorship, amounting to €1.8 million in 2006. O'Rourke said it will cost a sponsor about €500,000 to step into Budweiser's shoes and take ownership of Derby Sunday. The track is currently negotiating with a number of interested parties.

O'Rourke describes HRI as a matchmaker that facilitates the deal between the sponsor and the racecourse. The HRI also offers practical help by organising pre- and post-event press activity for the race organisers.

He said: "Our industry is superb at turning up to help sponsors get publicity. We can call on the big-name jockeys and they will turn out for the press event. We all know how important sponsorship is to our sport."

The Lexus Chase, the feature race of the Christmas Festival at Leopardstown, is now the most valuable National Hunt race of the winter season. This year the Grade One steeplechase has a guaranteed minimum prize value of €200,000, up from €150,000 last year. Aidan Connolly, marketing manager of Lexus Ireland, said the Lexus brand has grown to the point where the company can take advantage of such a high-profile sponsorship. He explained: "Racing is big in Ireland and we felt National Hunt racing had a resonance with Irish people in the same way that GAA does.

"We dipped our toes in the water a few years back with some smaller races. We wanted to be involved in something that was social as well as a racing event. We thought the Christmas festival in Leopardstown was a good fit, particularly as a lot of our customers live in Dublin."

Lexus first signed up as sponsor in 2004 and has now extended its sponsorship of the feature race for a further three years to 2009. But how does Lexus evaluate the benefit of the sponsorship? Says Connolly: "The name of the race is the Lexus Chase. That has helped us migrate the recognition from the previous sponsor. We measure the column inches in the newspapers, as well as the broadcast coverage that the race generates. In 2006, the Lexus Chase was mentioned in 487 different articles. This year to develop our sponsorship, our race day will now be Ladies Day which should get us more coverage."

The rule of thumb is that the sponsor pays between 25 per cent and 50 per cent of the prize value of the race, depending on its status, media profile and competitive demand. In effect, the race sponsor is securing ownership of a race at a major discount to what it actually costs to stage.

The HRI's selling point to marketing managers is that for as little as €2,000, their company can sponsor a race.

That level of outlay will be for a race at one of the country's smaller racecourses, with no television coverage outside bookie shops. Nonetheless, even smaller race meetings attract about 3,000 people, according to O'Rourke.

It's a different sell for the racing festivals, with race committees leaning on local businesses for support.

Besides the exposure from adding their company name to the race, sponsors can negotiate advertising on the racecourse, branding on the saddle-cloths, branding on the rug placed on the winning horse, branding in the winner's podium, advertisements in the racecard and big screen coverage, if there is one.

Another racing enthusiast is Anglo Irish Bank, which sponsors the Supreme Novices Hurdle at Cheltenham and jumps races all over Ireland. Anthony Kavanagh, director of group marketing and communications, said: "The value of a sponsorship is very hard to evaluate, as there are a lot of intangibles. How you maximise the sponsorship is important. The on-course branding, TV coverage and hospitality facilities are the key elements."