THE DARK CLOUDS BEHIND THE SILVER LINING
Published on September 16th, 2012
By Ryan O’Grady, Sailing World
With the recent announcement that an all-female team has placed a deposit for the first VO 65 One Design, the decision to move to a one-design boat appears to have been vindicated for the next Volvo Ocean Race. “I reckon that with the old boat, the Volvo Open 70, we would not even have thought about this,” says Richard Brisius, head of Atlant Ocean Racing, the management team behind the female SCA team. “The new 65-foot design is still a monster–still a huge boat–but it’s now at least possible, even though you could never say it’s going to be easy.”
The move to a one-design boat is a bold attempt by Volvo Ocean Race management to ensure the viability of the event in these tough economic times. With the average Volvo campaign costing upwards of $30 million in 2012, the Race’s CEO Knut Frostad hopes the new boat will slash the average campaign to $12-15 million for the 2014 race. Frostad has put his money where his mouth is; the Race is financing the construction of the first eight boats. But will a new boat and a $15 million budget be enough to bring eight quality teams to the line in 2014? As of right now, the answer appears to be no.
The reality of the Volvo Ocean Race is that there are two separate events occurring at the same time. There is the sailing race, and the hospitality race. We all know the sailing side, but for the large international corporations the Race is courting as sponsors, it’s the hospitality race that matters most.
In the 2009 race, Ericsson was widely believed to have spent almost $30 million on the corporate hospitality side alone. That spending is not included in the campaign costs being thrown around by event management. Granted, Ericsson did outspend other sponsors, but any company looking to use the race as a marketing tool on shore needs to add about $1 million per stopover to cover logistics, hospitality, and staffing.
Further, while the costs of the sailing campaign can be diluted over 2.5 years, the spend for hospitality is heavily weighted to a company’s 2014 marketing budget, and a $8-10 million sponsorship for 2014 is a big number for most companies to swallow in this economy.
The dark clouds are already building. Before the 2012 race ended, Groupama suggested that they will be prematurely ending their sponsorship with Franck Cammas. Veolia then pulled its sponsorship for Roland Jourdain, and just recently, Foncia terminated the MOD 70 funding to Michel Desjoyeaux after the 2012 season. When worries over the global economy can sideline the heroes of French sailing, heroes who have had some of the longest relationships in the history of the sport with their sponsors, where does that leave potential Volvo entrants? — Read on: http://tinyurl.com/SW-091612