Wednesday, April 4, 2012

MAS' Business Plan, QPR Jersey Sponsorship and Nannies

Our Prime Minister Datuk Seri Najib is a darn good job thus far in governing and leading the country.

I have said so not a few times.

However, I cannot reconcile with him on this, "QPR jersey sponsorship part of MAS' business plan: Najib" -
The prime minister said the initiative was a good publicity platform for MAS as the telecast of over 380 Barclays Premier League matches per season would reach 3.51 million viewers around the world.

"In addition, this sponsorship is a rebranding initiative by MAS in an effort to increase its revenue," said Najib, who is also finance minister, in a written reply to Wee Choo Keong (Independent-Wangsa Maju) at the Dewan Rakyat today.

Wee wanted to know the merit of the QPR jersey sponsorship to the tune of RM18 million and the cancellation of routes by Firefly, which had been taken over by MAS.
Does it mean our PM is endorsing the the MAS sponsorship deal?

If this is part of "MAS' business plan" then MAS might as well "pack up" or close down permanently NOW to avoid losses on "bigger" deals.

Let me echo what has been said by others MAS HAS BEEN CONNED BY AIR ASIA in more ways than one.

If MAS was not conned then the whole of the MAS Board of Directors must resign for serious incompetency.

This is the announcement by Air Asia to Bursa Malaysia. -
1. Introduction

......the sponsorship of the QPR away shirt in the Barclays Premier League (“BPL”) (the “Sponsorship”).

3. Salient terms of the Sponsorship

3.1 Pursuant to the Term Sheet, the parties shall sign the Agreement by the 30th day of September 2011 and the Agreement shall be for a term of two (2) years (“Term”).

3.2 The Company shall pay QPR a sum of GBP 500,000 as sponsorship fees for  the  duration of the Term.

3.3 In consideration of this sum, the Company shall receive among others:

• the rights to be the official “Away Shirt” sponsor of QPR;
• the designation of “Official Partner of QPR” for advertising and promotional purposes;
• the license to use QPR Intellectual Property for advertising and promotional purposes;
• LED, static board and interview backdrop signage at the QPR Loftus Road Stadium;
• the rights to advertise at the QPR Loftus Road Stadium on Match Days;
• advertising in QPR Official Match Programme and other QPR publications;
• Home and Away game Tickets and Hospitality benefits; and
• Access Rights, including to QPR Loftus Road stadium and training ground for promotional purposes, squad photo shoot sessions and signed QPR merchandise
That means GBP 250,000 or (current) 1,224,302.50 MYR for away games per year.

And how much did MAS pay for home games jersey sponsorship? RM 9,000,000 per year -
Malaysia Airlines' (MAS) recently-announced sponsorship for the Queen Park Rangers (QPR) home jersey in the Barclays Premier League will cost the national carrier some RM18mil or 3.7mil, according to a source.

The total sponsorship fee for both MAS and AirAsia for the English professional football club, which involves a term of two years, would cost some RM30mil (6.2mil), the source added.
Read my lips, Rm 9,000,000 for home games.

Mas pays Rm 9,000,000 for home games while Air Asia pays Rm 1,224,302.50 for away games.

Is this good "business planning"?

By the way this is interesting (see the Air Asia Bursa announcement) unless my maths is wrong Rm 1,224,302.50 + 1,224,302.50 + 18,000,000 = RM 20,448,605 and is not RM 30 mil as some "source" said. Will deal with this and the value of home and away jerseys later.

Now, as share of TV broadcast revenue is divided equally among BPL clubs, worldwide exposure cannot be a determining factor to value jersey sponsorship.

Therefore, the PM's statement "the initiative was a good publicity platform for MAS as the telecast of over 380 Barclays Premier League matches per season would reach 3.51 million viewers around the world", is not an issue.

The issue is - Is the amount MAS is forking out, RM 9,000,000 or GBP 1,836,000 per year, a fair price for the jersey sponsorship and is it fair for home games whereas Air Asia pays only Rm 1,224,302.50 or GBP 250,000 and gets more exposure on away (to other higher attended club) games in addition to enjoying all the above other perks at home?

From the Star biz report the source is trying to spin, “Typically, the home jersey sponsorship is more expensive than the away jersey, ” the source said.

I challenge the Star or "the source" to back up that statement in the context of the QPR deal.

Newcastle United FC another BPL club, when renewing their contract with Northern Rock, "Northern Rock signs new sponsorship deal with Newcastle United, worth up to $16 million" has some interesting reads -
Nationalized mortgage lender Northern Rock PLC said Monday it has signed a new four-year sponsorship deal with Newcastle United football club, worth up to 10 million pounds ($16 million).

The deal extends Northern Rock's relationship with its hometown club as both target renewal - the bank is on the hunt for a buyer to return to the private sector while League Championship leader Newcastle is closing in on promotion to the Premier League after a year in the second tier.

The total value of the contract will vary between 1.5 million pounds and 10 million pounds, depending on Newcastle's performance on the pitch.

The maximum value will only be realized if the team fulfills expectations and is promoted back to the Premier League - and stays there for the whole of the four-year period beginning next season"
What the "source" most likely conveniently did not mention is the value of jersey sponsorship depends on a BPL club having, in ascending order-  high home attendance, strong international fan base, consistently challenging for honours and winning.

In other words well supported, famous and successful.

Does QPR fulfil any of the above criteria?

The reason I chose Newcastle United is because it is an ideal comparison to illustrate how really dumb the MAS sponsorship of QPR jerseys is, albeit for home games.

Let's deal with attendance and fan base, the Bleacher Report, "Premier League's Best Fans: Ranking the Supporters of Each Club" -
As we all know, the Premier League is the most popular league in the world but what we all wonder at one point, what club has the best supporters?

With the worldwide reach of most of the clubs through either foreign owners or popularity coming from their success in the league, each club has fan bases far beyond England.

With that being said, based on the popularity abroad and domestically plus attendance figures, here are the rankings for the best supporters in the Premier League
Where is QPR? QPR is second from bottom -
QPR have the lowest attendance figure this season in the Premier League.

That is one factor contributing to their low position on this list.

with Newcastle in the top 5 of the BPL -
After promotion, Newcastle's attendance continued to be high as they had the third best average attendance in the 2010-11 season.

Soccernet puts QPR attendance dead last averaging 17,232.

Let's talk honors.

QPR's best is only having won a single League (now Carling) Cup, have never won the FA Cup or the 1st Division now called the Premier League.

Newcastle have won the 1st Division 4 times, the FA Cup 6 times with 3 European titles.

With all of the above facts and figures while "The total value of the contract will vary between 1.5 million pounds and 10 million pounds, depending on Newcastle's performance on the pitch", MAS paid 1.836 million pounds per year and that too for home games only.

Performance wise, QPR is fighting for it's premiership life while Newcastle is in contention for a place in the European Champions League.

Could it be the RM 30 million sponsorship "the source" quotes, also dependent on QPR's performance? Or is it without any pre-conditions?

A simple jersey sponsorship that not only looks but proven to be screwed up and when Mohammed Rashdan Yusof aka Danny "Rashdan proudly attended the QPR jersey sponsorship press conference", knowingly or unknowingly, signed off millions in a skewered deal "he will now rewarded to take charge of aircraft financing."

OH MY GOD!

Fran Drescher laughed her way to the bank in The Nanny and Another Brick In The Wall is Thinking of a Nanny Revolution.

Danny the Nanny, sounds good to me, fits the bill.

*Blogger has been out of action due to serious sinus problem.

3 comments:

Anonymous said...

Isn't the appeal of the sponsorship the tv viewing public? At the home games you have the name on the Shirt as well as displayed all around the pitch. Therefore it doesn't matter how many people are at the game, the millions watching worldwide on the tv will see the sponsor for the whole 90minutes. QPR may be a smaller team, but the teams they play are not so the appeal to watch their games is just as large.

Freddie Kevin said...

Anon 00:50,

"Isn't the appeal of the sponsorship the tv viewing public?"

Yes

"At the home games you have the name on the Shirt as well as displayed all around the pitch."

Did you read the Air Asia Bursa Malaysia announcement?

3.3 In consideration of this sum, the Company (Air Asia) shall receive among others:


• LED, static board and interview backdrop signage at the QPR Loftus Road Stadium;
• the rights to advertise at the QPR Loftus Road Stadium on Match Days;
• advertising in QPR Official Match Programme and other QPR publications.

Match progarammes are sold at home homes.

Therefore while MAS has it's advertisement logo only on the jerseys at home games, everything and every where else at Loftus Road, HOME OF QPR will be exclusively for Air Asia.

"Therefore it doesn't matter how many people are at the game, the millions watching worldwide on the tv will see the sponsor for the whole 90minutes."

In view of the above Air Asia having greater advertising space, MAS is at the shorter end of the stick.

"QPR may be a smaller team, but the teams they play are not so the appeal to watch their games is just as large."

The bigger and more globally recognised teams command wider audience, so while playing away to these team Air Asia gets good advertising mileage, at home to these same teams due to the greater advertisng space Air Asia benefits just as much or more.

Any way the point is advertisng sponsors would most of the time want to be associated with success and popularity apart from wide viewership.

Answer me this, why do the "Big Four" command more lucrative jersey sponsorships?

Going by your argument all jersey sponsorship should be the same which is not logical and practice.

Giving Newcastle as a comparison to QPR shows how ignorant MAS was to pay such a huge sum.

Newcastle betters QPR in all departments for advertising criteria and yet MAS paid a sum equivalent or more than what Newcastle's sponsors are paying.

How and why did MAS enter into such a ludicrous sponsorship?

If it is not conniving or conned than it must be incompetency.

Thank you for your comment. It is much appreciated.

All the best
Freddie

Freddie Kevin said...

If it is not conniving or conned then* it must be incompetency.