Let's look at the numbers

The Volvo Ocean Race is a great place to dig into the numbers that show that sailing does, indeed, deliver for sponsors. It has a global reach that is incredibly unique in the sponsorship marketplace due to its 9 month duration and its physical touch points in most of the worlds major markets.

The preliminary numbers from the first half of the 2008-9 VOR are outstanding, both in their absolute size and also in their growth from the 2005-6 race.

• In the first 5 months of the race, 2.41 million unique visitors visited volvooceanrace.org, up 39% for the same period in 2005-6.
• In the first 5 stopovers, the total number of spectators to pass through the turnstyles of the race village was 2,350,392. This is a 250% increase over the first 5 stopovers of the 2005-6 race
• The pro-am race day in Alicante brought 68,400 people to the village, while the total stopover attendance was 937,000 people.
• Cochin India, by comparison, brought in a total of 811,677 people with a peak day attendance of 107,289. Yup over one hundred thousand people in the race village on a single day. You'd have to see it to believe it....From being there I can assure you that it was absolutely amazing.

Unfortunately we don't have data from the individual teams that participated in 2008-9 quite yet. However, we will look at two examples from 2005-6 to set a base line; Ericsson and ABN Amro. Here are some very top line results their sponsorships in 2005-6;

Ericsson 2005-6:

• Estimated their media value benefit at US$ 65 Million.
• Put on 500 B2B focused events where they entertained 4,600 decision making customers at the Executive, VP, and Senior level.
• Engaged employees through over 100 seminars and workshops focused around the race.
• Estimate their total value of sponsorship at close to US$100 Million, which is a 450-500% ROI.

ABN Amro:

• Estimated their media value benefit at US$ 77 Million.
• Entertained 35,000 key customers and clients worldwide
• Engaged employees and developed corporate pride as demonstrated by the 25 Million intranet hits that their employees generated on the team's website.
• Measured their tangible total economic return on investment at 600%

It's time to sell the sponsorship

The key to a selling a sponsorship proposal is the in-depth focus on designing activation programs for the sponsor. Before going into talk to a sponsorship opportunity I research everything that there is to know about the company that I’m presenting to. I read every annual report, SEC filing, analyst call, and executive interview that I can get my hands on. I study the strategies of their competitors as well. If they are growing into a new market, then I design it into the activation. If they are having employee retention or recruiting problems then I design the solution into the activation. Launching a new product? Want to demonstrate a technology? Purchasing a company? Launching a philanthropy project? Need a voice for a PR campaign? Redefining their brand? Whatever and where-ever the company wants to go I build the platform to catalyze their core business goals and relate it all to the property attributes of the sailing team. The sailing project is not the focus of the presentation; it is, instead, the base that the entire business case is built upon. It is also critical to show the sponsor that their investment’s returns will be both measurable and also be independent of the sporting outcome of the races. Ericsson Racing's VOR 2005-6 project is the perfect example of a measurable activation strategy, that was wildly successful, even though the sailing team was, arguably, not.

Think that putting a pitch presentation together sounds like a lot of work? Well... it is. Mainly because every pitch must be fully customized for every audience. This is why properly managing the sales cycle can help this process. Leads are fairly easy to generate. We all know people that know people. And there are always cold calls that can fill the pipe line with leads. However, the key is to properly qualify each of our leads into realistic opportunities. Opportunities are the leads where the where the activation case is strong once vetted through the qualification process. It is in the preparation for the selling stage where the research and creative planning happens.

We have a big job ahead of us. It is critical that we make sure that the sailing fan base has an accessible and entertaining America’s Cup 34 and Volvo Ocean Race in 2011-12 to enjoy. Hopefully we all can, collectively, light the imaginations of sponsors to join us as we transform the commercialized and entertainment side of our sport.

Again please leave your comments and questions for me to reply to. I've enjoyed reading and responding to all of the comments so far.... Also stand by for case studies in the next blog posts.

-Matt out
37 48.0N
122 26.6W

Creating real value for sailing's sponsors

To start off the second posting in this series, I want to quickly discuss the partners that make up a Volvo Ocean Race or America’s Cup team:

The Sponsor: The sponsor is the end customer. The sponsor’s key competence is aligned with their core business, whether it be manufacturing cars, writing software, consulting businesses, banking or designing handbags. The sponsor makes decisions on building new factories, hiring employees or launching marketing programs, based on that project’s investment yielding a positive Net Present Value (NPV).

The Activator: This is typically an events agency such as Momentum, Octagon, or IMG. They work for the sponsor to build all of the auxiliary activities upon the sailing property platform.

The Property: This is the sailing team. It provides the base for the activator to build a positive NPV business development program targeted at the sponsor’s core business. The end goal of the sailing team is to manage the sporting operations, while supporting the activator’s plan.

I’ve read a lot of team sponsorship proposals over the past 5 years: Volvo Ocean Race, America’s Cup, World Match Racing Tour, European IRC, and Med Cup teams... Most sponsorship proposals lose sight of, both, the customer and the product. When I read most sponsorship proposals, generally, my first thought is ‘Hey, I’d love to sail for this team. This is going to be fun.’ The proposals talk about the race, adventure, prestige, competition, sailing team members and the program’s management structure - all of the key elements to winning a sail boat race. While this type of presentation does have a place in the sales cycle, it does not focus the product to the customer. The product that we are selling is a platform for corporations to leverage their core business goals.

Remember, we are selling the activation plan, and not the sailing team. The reason for this is straight forward; If a sponsor only financed the sailing property and did not make a further investment into activation, they would, most likely, just barely recover their costs of the property's sponsorship cost. However when the property is coupled with a sophisticated activation program, then 2 things happen; Not only is the activation the source of the most significant returns on investment, but also, the activation, through network effects, brings more attention to the sporting property, thus increasing the returns that the sporting team generates. The following illustration gives a basic insight to this principle.

Since we've examined the marketplace (in part 1), understand how commercialized sailing projects are structured, how sponsors financially justify their investments, and where the real value is generated we are now ready to look at the sell cycle....stay tuned for part 3 of this series.

Thanks for posting questions and comments, I'll continue to post responses.

-Matt out
37 48.0N
122 26.6W

Filling the Sponsorship Pipeline

I’ve decided to kick off a multi-part series of posts on the ‘Commercialization and Business of Professional Sailing’ as a bit of a change from my typical ‘Life from the Nav. Station’ pieces. This has been a personal interest of mine for some time, but seems particularly timely given where we are with the VOR and America’s Cup timelines. In this first part I will establish a baseline for where 'we' are in the global sponsorship market place.

Let's dig in...
With the start of next Volvo Ocean Race two years away and the America’s Cup/Louis Vuitton Series, ostensibly, returning to life, we sailors are asking: “Who’s going to be on the starting line”. While some of the teams will be underwritten by wealthy ‘hobbyists’, both the Volvo Ocean Race and the America’s Cup have their eye on the commercialized sports level where F1 and NASCAR currently reside.

What does this mean?
There are a lot of corporate sponsorships that will need to be sold in the next 12-24 months. Consider that an America’s Cup team will spend at least $20 million, and a Volvo Ocean Race team spends about $8 million annually. With an idealistic, 12 AC and 12 VOR teams, there is at least a $336 million annual pipeline that must be filled to sustain each event. To add some perspective on what $336 million represents in the advertising industry, in 2008 $918 billion was spent globally on all forms of advertising; $16.8 billion was spent on sponsorships, and 69% ($11.6 billion) of those sponsorships were allocated to sports (IEG Sponsorship Report)Thus the America’s Cup and the Volvo Ocean Race teams should represent a 2.9% market share of global sports sponsorship.

By way of comparing the VOR or AC to other sponsorship properties:

• The title sponsorship of a week long PGA event has a price tag of $15 million.
  
• A full year (38 race) title sponsorship of a NASCAR team costs $18 million.
  
• Each ‘Gold Level’ sponsor of the 2008 Beijing Olympics spent $100 million.
  
• A top tier Formula1 team’s annual operating budget in 2008 was $400 million.
  

If you consider that, practically, none of the AC or VOR teams have financial commitments from commercial sponsors at this point in time, we have a long-long ways to go to reestablish professional sailing’s stake in the global sponsorship market. In the second post in this series, I will discuss (what I see as) the make up of a successfully commercialized sailing project. Please post comments and questions. I will post responses to each of them.

-Matt out
37 48.0N
122 26.6W

Starry Starry Night

The sun has set, and the moon has not yet risen. 

 

After a week of sailing across the Pacific Ocean we, finally, have a cloudless night.  The stars are just about as clear and numerous as any of us have ever seen.  It’s a great night to be out on the ocean.

 

I’ve spent quite a bit of time staring into the sky today.  Part of the TransPac requirement, for Navigators, is to resolve 4 lines of position based upon celestial navigation.  It’s been about 10 years since me and my college buddies Ben, Eric, Hans, and Shannon sat in on a ROTC Navy Navigation course at the University of Michigan.  I only remember one thing about the celestial navigation part of that course; always remember to pack a hand held GPS and a bunch of extra batteries, just in case the boat’s GPS goes on the fritz…

 

In the spirit and tradition of the race I spent a couple hours today, relearning the details of how to plot position fixes using a sextant, a watch, the sun, and a computer based set of sight reduction tables….oh, there was also the text book that Brad Avery brought along that served as my crutch throughout the whole process.  Without its guidance I, definitely, would not have gotten very far.  My first fix took about an hour and a half to resolve. The fix was 124 miles off from our actual position (as compared to our GPS which gives position accurate to less than 2 meters, updated 5 times per second).  With the process now streamlined and my work flow sorted out, I was able to resolve my next position in about 40 minutes and was about 55 miles off from our actual position. 

 

We have 231.81 miles left to go in our journey across the Pacific.  We are in a parade now. Our goal of finishing in the winning position is an impossibility.  Fortunately, tonight, we have great conversation, an endless supply of jokes, a sky full of stars, an upcoming moon rise, warm winds and perfect sailing conditions to keep our spirits high….Sammy’s freshly baked brownies, paired with a glass of cold milk, add quite a nice touch to the evening too…

 

-Matt out

 

22 50.940 N

153 14.134 W

(precisely)

Instrument's meltdown?

“Hey Matt. The instruments aren’t working.  Can you reset the system?” was the call I heard from on deck

 

“Strange. I have data coming into my computer.  Must be an ondeck display problem”, I thought to myself. Let’s try turning the instruments off and on again.

 

A flip-flop of a switch later …..

And, still, nothing. 

 

It was blowing 22 knots, it was cloudy, the sun had just set and the moon had not risen yet. It was pitch black on deck and the guys were, literally, sailing blind.

 

“This is not good” I thought.

 

I went for the low hanging fruit again;

Flip -flop…

Nothing.

 

“Crap. This is not good”

 “It must be some sort of connection problem.”

 

I traced out the cable that connects the on-deck instrument displays to the system down below and set out, in a form of triage, to remove all possible ‘points of failure’. Clip- clip -clip went the wire cutters and I spliced a bundle of cables together. I then hit them with some solder to hold the wrangled mess of wires together.

 

“That might do it. Lets check”

 

“Crap.  I have NOTHING now?!’,  Not even my computer was getting data anymore.

“This is REALLY not good”

 

“Hey Matt.  We can’t see where we are going.  Hurry up!”  the cries echoed, repeatedly, from on deck.

 

“Oh boy, where to start?  This could be ‘a major’.  We might have a full on instrument melt down here. “

 

My buddy, Sammy, was now by my side helping me figure out the problem.  He handed me a cordless drill and we dismantled the panel that contains the electrical, instrumentation and computer systems, revealing a mess of wires of different colors going into and out of a menagerie of boxes.”

 

“Let’s start with the basics.  I wonder if the instruments are getting power.  They aren’t responding to anything and we aren’t getting any sort of output…. How is this thing fused?’

 

‘ … ah.  I see one of e2’s power/ network junction boxes back in there. Got a philips head screwdriver Sammy?   Let’s look in there.”

 

Sure enough; A blown 5A fuse. With luck on my side, I found  a spare fuse taped to the inside cover of the box.  The question was, however, what caused this fuse to trip?  This might be the only fuse that we have, who knows, and I don’t want to turn on the power and have it kick again.”

 

I kept probing. 

 

“Ah ha!  Found it. We are out of the woods. It’s a loose network wire.”  This would explain the initial network problems and then the eventual blown fuse.  I reconnected the wire into its rightful home and flipped on the instrument power.

 

Full systems go….whew…that was a close one.

 

Now let’s see if we find just as much luck with a couple wind shifts to claw our way past a couple boats. 

Humm…. that could be a bit more complicated…

 

-Matt out

24 18 N

145 03 W

Pacific Ocean Sleigh Ride....Finally

18 knots of wind, clearing skies and great sailing today…more importantly, significant gains on our entire fleet with every hourly position report.  Great news and spirits are high.

 

We are half way through the race. It’s now less than 1200nm, before we’ll be sipping on our first Mai Tai on the docks in Honolulu.  Thus it was a perfect time for me to break out my ‘finish time contest’.  This morning I posed a series of factoids on my bulletin board. The notice read:

 

As of 1200 (noon) Hawaii Local time today:

Distance to finish: 1200nm

Previous 24 hour run: 300nm

Wind Forecast: 12-20 knots, 40-70 TWD, periods of squalls

Bearing to Finish: 250 degrees

Router time to finish: 4d 8h

Router distance to sail to finish: 1300nm

 

Everyone submitted ‘secret’ entries, until everyone had a chance to enter, then I posted the entries on the wall of the nav station.  There is plenty of consensus for a Tuesday afternoon arrival. However Bruce Nelson, Sam Heck and Brent Ruhne picked times on Monday.  While everyone is excited about winning the bottle of rum that goes along with winning the contest, we are focused on the real prize- beating the other Sleds to  the finish line.

 

-Matt out

25 29N

138 33W

 

 

 

 

TransPac Day 3: Ups and Downs

Or … to put it into chronological order: Downs and Ups. 

 

We had a very tough pill to swallow this morning.  We suffered significant losses in order to execute on our overall race routing and positioning strategy.  To compound our woes, we were a couple hours late to change the spinnaker from our reaching oriented A3, to our downwind spinnaker, the A2.  Thus, the lead pack of OEX, Pyewacket, and Grand Illusion all gained on us  from sun rise to noon this morning.  Certainly the questions were asked; “ are we sure that we are doing the right thing here”.  There is nothing worse, as a navigator, than having to deliver 3 back to back scheds (position reports) that only feature  losses. 

 

However this afternoon thing turned around.  Since 2pm we’ve been making massive gains on the fleet.  In a 2 hour stretch, from 2 to 4pm, we erased all of our morning’s losses- the expensive move that solidified our southerly lane.  From 4pm onward we’ve been mak’n money.  Now that the opening moves in the race have been made, and with our competition locked into their lanes, we’ll have to see how we do over the next 4 days on starboard tack.  We anticipate making gains down here to the south, but have our eyes on an unstable forecast for the last 2 days of the race.  Anything can happen, but for now, there are plenty of smiles to go around onboard the Holua.

 

-Matt out

27 17.16N

127 58.00W

TransPac Day 2

From where we left off yesterday we were rounding Catalina Island with the front runners in our class; Pyewacket, Grand Illusion, and OEX. The battle rages on. Pyewacket, Grand Illusion and OEX are in a neck and neck battle, all within sight of each other. Meanwhile we were able to execute our strategy for the first 36 hours of the race exactly as we planned. We came
around Catalina Island at a heading of 215, while the 'pack of three' maintained a slightly higher line. This places that group about 20 miles to the north of us. While the 'race viewer' might show them as closer to Hawaii, and thus on the top of the leader board, we are all within about a
mile of each other, as I score the race. It will be interesting to see how things play out. QuickSCAT images show lighter wind directly in front of usand to the north. This is also reflected in some of the numerical models that I am reviewing. Like the analogy of the runners on the track that I referred to in a blog from just before the race started; We will sail a bit
longer distance (like running around the outer lane 6 on a track) than the group of three to the north (that will run on the inside lane 1). Our plan is to stay in higher wind speeds and in faster true wind angles that those to the north of us. If our plan is correct we will start to reap the rewards over the next 72 hours...

Even though we are only 36 hours into the race we've already had plenty of adventure. The sunny skies that we left under, as we departed Long Beach yesterday, have turned to complete cloud cover today. We left the dock wearing shorts and a t-shirt, while today we have been bundled up in all the clothes that we brought on board. We had to make a repair in our mainsail,
which resulted in sailing with only a headsail, for about an hour last night. We have seen dolphins, flying fish and sun fish swim by our boat. And, I am very happy to report, that we have been eating like kings. Sammy Heck, the boat's captain, has put together a full-on royal menu. We had Honey Nut Cheerios swimming in ice cold milk for breakfast, peanut butter
and concord grape jelly sandwiches for snack, turkey-tomato-avocado sandwiches for lunch, and a three course dinner of soup, salad, and beef stroganoff over rice. Maybe I'll have some grapes or an orange for desert. Thinking practically, Sammy packed the boat with 'real food' for the first 5 days, where extra 'cargo' on the right side of the boat makes us faster. Once we get to the last half of the race, where being as light as possible is advantageous we will supplement with freeze dried food.

Brack Duker, the owner of Holua, has put together an all star cast of characters, and we are having a tremendous time out here. We are racing hard just as hard as we are laughing, so I'd say we have the trim of theboat just about right.

-Matt out
29 44.2N
123 29.5W

Back at it: The TransPac is underway

Aloha from the Holua.

At 1pm this afternoon we started our race to Hawaii. The conditions could not have been better for both racers and spectators. We were sent off by a tremendous fleet of the race fans that came out for Sunday afternoon pleasure cruises.

In an effort to start at the favored pin end of the line, we were pushed over early, by a couple aggressive boats below us, just before the gunsounded. This forced us to dip around the pin end of the line and restart. Because we were quick to respond we didn't loose that much on the fleet and were able to reach down into a clear lane of wind. By the time we reached Catalina Island, 20 miles upwind, we were back in touch with the leaders. With some fabulous crew work, that included 8 tacks and 2 sail changes below the rock cliffs of Catalina Island, we found ourselves in front of our class. The other front runners in our class our Alchemy and Pyewacket.

Right now we are exactly where I hoped we'd be coming around Catalina Island. We have our with our bow poked out just a bit and are in the leeward lane... Just the perfect place to execute our race plan over the next 48 hours. Curious what that plan is? Well, I'm not going to tell you. You'll just have to wait and see what we have up our sleeves.

-Matt out
33 22.3 N
118 44.4 W

Group 2 is off and racing

The TransPac is a 2230 mile race from Long Beach Ca, to Diamond Head, the infamous backdrop to Waikiki Beach in Oahu. Since there are boats of all sizes competing, the race starts in 3 waves so that the different classes will finish at about the same general time. The slower boats started on Monday, the middle group started at 1pm this afternoon, and our group, of the fastest boats, will start on Sunday.

The dock talk this morning was abuzz about a weather forecast that is misbehaving... The more complicated and abnormal the better, I'd say...but apparently not all navigators and skippers would agree with me.

Let's have a look at the weather scenario for those that kicked off their 2009 TransPac this afternoon in the middle group;

In a 'normal weather scenario' the racers are pushed along by winds rotating, clockwise, around the Pacific High. Typically the center of the High is located directly west of northern California at a Longitude somewhere midway between Hawaii and the west coast of the USA. The weather maps in this scenario would look quite plane; a big 'H' out in the ocean with a bunch of concentric circles of increasing size around around the H. These rings depict the isobars (lines of equal pressure). The wind close to the H is light and the wind a couple rings out away from the H is nice for downwind surfing....thus the strategy is similar to running on a track. Would you rather be a slow runner running around a track on the inside lane one, or a fast runner on the outside lane six.

Most of the woes on the dock this morning were focused on this image:


Quite different from 'normal'; you can see a front that reaches up from Hawaii, an L where an H should be, and massive gaps between the isobar lines. This all indicates very little wind and very tricky conditions. The trade winds are, for all practical purposes, completely shut down. Furthermore, the 500 millibar analysis features a massive trough that is further complicating the 'normal' wind flow at the upper levels.

To look at a wind and pressure (MSLP) analysis (from the 12z GFS model run, plotted in Expedition), you can see that there is very little wind across the rhumb line (as noted by the black arc below). The areas of light wind are noted by the light purple regions, while the windy areas are in the green - to red side of the color spectrum.

You can see that the analysis changes quite a bit over the next 5 days. This is what the wind will look like about half way through the race for those that started today:You can see, by the blue regions just below the rhumb line, that some normalcy will return to the Eastern Pacific by the middle of next week.

So what will the game plan be for the boat starting today? I've heard that some boats are going to attempt a north route, while others will attempt a deep southerly route as their long range plan. While the boats started this afternoon in a coastal 12 knot sea breeze, the wind will quickly drop off to below 5 knots by around 3am tomorrow morning. It will most likely be a very slow morning for the fleet in group 2. I'd put my money on the boats that favor the southerly route coming out of the blocks. Those that press north will be rolling the dice and could likely find them selves adrift.

It's going to be a complicated couple days, but the race course is full of opportunity when the weather is this dynamic. Plenty of people asked for my opinion this morning before they left...the best advice that I could give was, "start on Sunday".

-Matt out
33 45.69N
118 11.62W

Fast forward to now

Where last I left the blog, I promised that the blog would continue....

Clearly, it's taken awhile for me to come around. I must admit, once I left Team Delta Lloyd, I ran out of ideas for blog posts. I had a fully diagnosed and incurable case of writers block. While I anticipated continuing to write blog posts about the VOR from the sidelines, I discovered that I had a lot more to say as a race participant than as a race pundit.

On my way home from Singapore, I swung through Boracay, a 1x7km island in the Philippines. I lived there for a month. I was the perfect way to unwind from the VOR. The very humble room that I rented was located above a cafe on a long white sand beach. I spent most all of my time in Boracay kite boarding, running, swimming and eating copious amounts of fresh seafood. When I returned home to San Francisco, I moved into a new apartment - conveniently located about 3 blocks away from the St Francis Yacht Club. The sailing season was close around the corner so I spent the remaining weeks of winter and the early spring enjoying some fabulous skiing conditions in Tahoe, while also working on some business development oriented consulting projects.

As the sailing season started to kick into gear several sailing projects headed my way, including the opportunity to sail in the TransPac as the navigator for Holua, a very successful Santa Cruz 70 program. I immediately jumped at the chance. We've had one event leading up to the TransPac, the Cal Cup, which we won, and have done some offshore testing as part of our preparations. Most of the crew have spent a lot of time with the boat and sailing with each other over the past several years, so I am the 'new guy' on the team.

It's great to be back at it; immersing myself into racing, polar optimizations, sail cross over development, and weather analysis. It also feels good to be writing again. Maybe my writers blog has been cured. I have plenty of blog topics on my mind, so hopefully the Volvo Hotseat blog can pick up where it left off.

-Matt out.

on Thursday I'll post a weather briefing for the Divisions that are starting at 1 pm PDT, later that day.

Getting back into the Hot Seat....

I was working at my computer this afternoon, sifting through GOES satellite images from the Pacific Ocean, when I got an email from my college buddy Ben;

"Matt, you are doing the TransPac this year.  What do you think about bringing back your blog?  Come on...bring it back..."

Alright Ben, you've got it, my 'Hot Seat blog' is back...stay tuned...

-Matt out

It's time to move on...

I'm leaving Team Delta Lloyd. This interview with Volvo gives a pretty good summary of what happened: Click Here

But don't worry, the blog will continue. As always, if you have topics that you want me to cover let me know: blog@gregorysports.com

-Matt out