James Boyd Photography / www.thedailysail.com

Sir Keith Mills does 'an Ecclestone'

We learn more about the OSM-IMOCA deal and look at the problems it will face

Monday November 12th 2012, Author: James Boyd, Location: France

With a surprisingly strong turn-out of 20 boats for the present Vendee Globe, all might appear rosy with the IMOCA 60 class, but this sadly is not the case looking closer.

Campaign costs are going up while sponsorship is well down. Mark Turner believes that team sponsor spend for the present Vendee Globe represents only around 20% of the equivalent figure for the 2008 race, with for example six new boats built compared to 18 four years ago.

While the economic crisis is certainly a contributing factor, the class has not helped itself. In particular, races in which IMOCA 60s can compete are few and far between - prior to the Vendee Globe this year there was just one IMOCA event, the Europa Warm-Up and only seven boats entered that.

The circuit also continues to be too ‘French’ with most events emanating from France and French boats still comprising the majority of the fleet. While the class’ ‘other’ round the world event, the Barcelona World Race, has gained perhaps unnatural traction thanks to the tax breaks the Spanish government have been willing to provide teams and the event itself (something we understand will thankfully also be available for the next race in 2014-15), the Vendee Globe remains the stand-out event, alongside other long-standing French multi-class races such as the Route du Rhum and the Transat Jacques Vabre.

All of the above makes it very difficult to sell an IMOCA 60 campaign to a sponsor, particularly one outside of France, and it is with this in mind that the IMOCA class has recently signed an agreement with a company set up by Sir Keith Mills, called Open Sports Management (OSM).

Aside from his TeamOrigin venture and more recently the Olympic Games, Sir Keith Mills has been a patron of Alex Thomson since he sailed part of the Clipper Round the World Race as part of Thomson’s crew in 1998-9. This has included providing the business brains and vital seed finance behind Thomson’s IMOCA 60 campaigns dating back to when their company acquired Roland Jourdain’s 2000 generation Lombard design Sill, back in 2003.

“It’s very frustrating that shorthanded ocean racing doesn’t get the audience it deserves,” says Mills. “Without the audience, the commercial viability of any class becomes a challenge.”

The new union between Open Sports Management and IMOCA is very much akin to the one Bernie Ecclestone negotiated in the late 1970s culminating in F1’s famous ‘Concorde Agreement’ of 1981 giving the Formula One Constructors Association (of which Ecclestone was President) the right to negotiate TV deals, a right which FOCA in turn ‘leased’ to Ecclestone’s company Formula 1 Promotions and Administration. Since then F1 has become one of the world’s most successful sports properties.

“It is an exact parallel, although smaller,” agrees Mills. “The FIA organised motor racing and they struggled hard to commercialise it. To their credit they did a deal with Bernie Ecclestone who set up a separate company and invested money and brought in some really smart people and has built the sport. While ocean racing is never going to compete with F1, I think we can take some lessons from that and actually across all sport – Olympics, football, basketball, etc - the rights of those sports are worth substantially more if they are pooled together than if they are sold separately.”

So OSM will package up and sell the rights on behalf of the IMOCA class. Sports marketing experts are currently being recruited by the company that will be based in Switzerland. The staff is likely to be Swiss, French or at least multi-lingual, executives who can work very comfortably in France, as Mills puts it, since the class is at present largely French. Among the front line in Les Sables d’Olonne last week were Mills’ ex-TeamOrigin staff, Marcus Hutchinson and Leslie Greenhalgh, who have been going through the initial phase of talking to and getting feedback from sponsors, race organisers and skippers.

OSM’s short term aim, according to Mills, is to develop a four year plan over the winter which can be presented to IMOCA around the time the Vendee Globe finishes in February. Once approved by IMOCA, they will then take it out into the market. “I would like to think that by the end of 2013 we’ll have a title sponsor for all IMOCA 60 racing. We’ll use that as a platform to build other events. It is a very attractive class, of huge value to many multi-national companies. That would immediately take it to a different place.”

A development class going into terminal decline is hardly new in sailing. In fact concerns have been raised about the future of the IMOCA class since the mid-2000s. But although steps have been made, nothing fundamental has been done to fix it and there is an element that believe it may be already too late to stop the rot.

In France the best parallel is with the ORMA 60 class, which with escalating costs, boats that suffered repeated breakage, finally died in the mid-2000s. In fact ORMA was in a worse state thanks to its terrible reputation for carnage and no international element to the class at all. But the principle reason that its decline was unable to be stopped was the disarray and lack of agreement within the ORMA class itself. Run by the teams there was little conformity of thought and with issues left unresolved the world’s most exciting breed of offshore race boat perished.

With IMOCA’s support – if such a thing is possible, given that it is an equally disparate group to ORMA and larger too - OSM intends to help prevent this from happening to the 60ft offshore shorthanded monohull class as well. “The failing of other sports and other sailing events and classes has been that, by and large, the skippers try and organise it when it requires investment and smart people that know how to do it,” observes Mills. “The team that we are going to build with OSM probably won’t know much about how to sail boats, but they know how to put rights packages together.”

While this agreement with IMOCA is recent, Mills has in fact been trying to persuade the class to get itself in order for some time. With few top events, little racing and frustrated with the class’ lack of exposure outside of France, Mills two years ago persuaded them to commission a consulting firm to come up with some ideas to address their problems. This company, Portus Consulting, which Mills has previously worked with on London 2012, made their presentation to IMOCA last year. “They came up with a great plan and it was presented to IMOCA who said ‘this is a great plan, we should do this’ - but then nothing happened...” recounts Mills. “And nothing happened because it requires investment. So at the beginning of this year, Luc [Talbourdet, IMOCA Class President] approached us again and said ‘nothing has happened – can you help?’”

Mills drafted a two page terms sheet, but fundamental to the agreement was it getting unanimous support from all 90 IMOCA members, which, remarkably, in fact probably in a first, the class managed to achieve. “That is the only way it is going to work, then I’ll set up a company and I’ll invest in the company,” Mills told Talbourdet. “We needed global, worldwide, exclusive rights to all commercial aspects of the IMOCA class. We wanted a very long contract, and we wanted the economies to work both for IMOCA and for ourselves. We spelled that out very simply in the term sheet and that is what all 90 IMOCA members agreed.”

Mills won’t say how long the term of the contract is nor his degree of investment, however the contract is long. “It has to be long because the contracts we’ll be signing with potential partners are unlikely to be less than four years and are likely to be a lot longer. Olympic partners sign 8-10 year contracts and that is how you build consistency, so the rights that we have now have to be able to reflect that.”

So where from here? OSM has to work from the existing IMOCA landscape – the events, the competitors, the present sponsors and grow it from there. But there are several hurdles to cross.

A significant difficulty that lies ahead is that, like ORMA, but to a lesser degree, the IMOCA class is not only very French-centric but it is even more specific than that. Companies like PRB, Sodebo and Akena Verandas are based in the Vendee region in western France and come on board principally because of the phenomenal success of the Vendee Globe.

So making the IMOCA class more global is going to have to attract a new breed of team sponsor more akin to Thomson’s Hugo Boss or Kito de Pavant’s Groupe Bel or Javier Sanso’s Acciona, which would be interested in the IMOCA class providing a significant global reach. But it is hard to see how this would be attractive to the Vendee-based companies presently involved or even some of the larger companies involved, like Banque Populaire, with little commercial interests outside of France.

“Our job is to build the class, and you can only build it by taking people with you, by making it economically viable and providing some exciting events. It starts with building a great product,” says Mills. “This isn’t a clean sheet of paper. There are a lot of events – Route du Rhum, TJV and Barcelona World Race and the Vendee Globe. It is putting those events together and supplementing them with new events that are going to cover those parts of the worlds that are going to be interesting to commercial partners.”

He adds: “Europe has to be at its heart as that is where its strength is right now. We are looking at some Asia events, but you have to walk before you can run.”

Mills talks of appealing to China and this is already an idea that IMOCA has tried to achieve when they launched the China Cup, due to be held in 2006 but which, embarrassingly, after much work they had to pull the plug on due to a lack of entries. Mills is aware that to make sure events succeed requires not only new boat sponsors but a new economic model, enabling teams to fund their participation in such races. This has occurred in the past with IMOCA events – most notably the EDS Atlantic Challenge, run by Chay Blyth back in 2001, in which each team was paid in the region of £100,000 to compete and had a lot of their costs covered.

“We have to change the economics of the sport. Skippers don’t turn up because they can’t afford it,” Mills acknowledges.

But one wonders how a company like Akena Verandas, Arnaud Boissieres’ sponsor, which is very enthusiastic and claims to get great returns from their IMOCA 60 campaign, might figure in this new era? Will, for example, the IMOCA class end up as a two tier entity with some events and sponsors that primarily serve the French domestic market while there is a higher end to the class that goes global?

“The Vendee Globe is the heart and will always be the pinnacle and we want to grow the Vendee Globe, but we have to recognise that we have to appeal to China and those parts of the world that are not currently stuck in recession,” says Mills.

Vital will also be to add more events into the IMOCA calendar but also – and here we hear echoes of one of Mills’ beefs with the America’s Cup – some certainty for the future, particularly in terms of the calendar.

Central to Mills’ plan is also to dramatically improve the way events are communicated. “Less than 5% of the stories out of IMOCA 60 racing are told, because there just isn’t the technology there to capture it nor is there the investment there to edit it and package it – it is not rocket science. If it is told in the right way it could attract a very wide audience. We need to build some interesting technology on the boats so that we can start telling the story, whether it is on YouTube or Facebook or whatever, globally because the distribution systems available now digitally are enormous if you can provide content.”

So a communication partnership that can provide cheap or, better still, free satellite airtime would seem to be a must.

Having the support of Sir Keith Mills is a huge asset to the IMOCA class and given his track record, if anyone can pull this off, it is he.

Tomorrow we get the thoughts of Mark Turner...
 

Latest Comments

  • HieldM 12/11/2012 - 20:51

    Just a comment regarding the Vendee based sponsors. If there is an increased global interest in the IMOCA class it may be possible with the help of OSM to link sponsorship between two different sponsors who may have interest in different races and can share costs, for instance one may want to do the Vendee Globe the other the Barcelona Double and could share build and running costs.

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