Home ‘Despite the troubled period, we will exceed our commercial targets’ | Philippe Le Floc’h

‘Despite the troubled period, we will exceed our commercial targets’ | Philippe Le Floc’h

Fifa chief commercial officer Philippe Le Floc’h took questions from SportBusiness on sponsorship, media and Fifa’s commercial future.

What is the core KPI for Fifa: is it engagement, revenue, or participation – or something else?

As we stated two years ago when president Infantino launched “Fifa 2.0” – our organisation’s vision for the next ten years and beyond – participation is our main focus. In the ten years to 2026, we plan to double participation in the women’s game around the world to 60 million, while we also set ourselves the ambitious target of attracting the involvement of more than 60 per cent of the world’s population in football.

Of course, we can’t attract participation without engaging with the fans, and we are growing our digital presence all the time – this year we launched social media accounts in China that have already attracted millions of followers. And revenue is naturally at the heart of our plans to bring more and more people of all ages into the game as we pursue our other “Fifa 2.0” objective of investing more than $4bn back into the sport. But the thing that tells us if we’re doing our job is the number of people who play, coach, support and love football.

There are plans to expand the World Cup to 48 teams. What opportunities would this bring Fifa?

We will indeed expand the World Cup to a 48-team format as of the 2026 edition. First of all, there are some natural opportunities that emerge when there are an additional 16 countries competing for places in the tournament and which create conditions for more favourable broadcasting and marketing rights for the organiser. But when we think long term, it comes back to participation and it is about having more nations having a realistic chance of making it to the World Cup, which gives everyone an incentive to raise their game. This means development of the sport, both in terms of quality and professionalism. Essentially, it’s win-win for everyone as the sporting and commercial aspects of the game grow together all around the world.

What will Fifa and the World Cup look like in 2050?

Well, if we look back an equivalent amount of time to the 1986 World Cup, there are many things that we have now that we couldn’t even have pictured back then, such as second screens and social media through which we can engage with fans. In 2018, at this year’s World Cup, we have a number of major innovations for the fans, such as producing the entire competition in UHD-HDR quality and offering a 360° virtual reality experience of the games: things that weren’t possible a few short years ago. Given that the rate of change in technology is only getting faster, I can imagine that the 2050 Fifa World Cup will be enjoyed by fans around on a level of engagement that will offer a more rewarding experience for both casual and dedicated fans of the sport.

Media

Fifa has publicly stated its aim to earn $3bn from TV rights sales for 2018. Will you hit this? What is driving Fifa’s media-rights revenue around the world?

At this point we are certain to meet our revenue objectives for the 2015-18 cycle: the 2017 Fifa Activity Report states that at the close of last year we were 98 per cent of the way towards the $3bn target and we have concluded further deals that will take us beyond $3bn.

The Fifa World Cup represents the pinnacle of world football and, as such, it commands a premium price in terms of media rights sales. If you put our rights sales activities in the context of proliferating devices, shorter attention spans, and greater competition for people’s time, the World Cup becomes even more valuable in bringing together a massive, diverse, global audience around a single live event with 64 matches that are each like a final. As a result, competition for our rights is more buoyant than ever: including traditional broadcasters and less traditional new content players.

Which have been the most interesting deals that have been struck for this tournament?

It is difficult to pick out individual markets, but of course we are especially pleased to welcome the new broadcast partners on board that will show Fifa events for the first time. At the same time, some broadcasters have been with Fifa for many years and will be broadcasting under a renewed licence for the 2018 competition, and their continued faith in Fifa’s products is very important to us.

All of your deals covering sub-Saharan Africa, for example, are just for 2018. Why?

We have concluded a number of deals for 2018 only. We take in to account the broader dynamics in each market to deliver the best commercial outcome overall – sometimes shorter deals are the best way to achieve this, and we believe that was the case in sub-Saharan Africa this time.

Does this represent a change in policy from Fifa, which has historically often sold media rights to multiple tournaments together? (Such as selling media rights in Brazil, Mena et cetera until 2030)

There’s nothing to stop us from selling multiple tournaments together if we consider that it will derive the best outcome for Fifa. We are conscious that changing market dynamics, as well as factors such as announcing the host, can have a material impact on the value of rights.

Will Fifa seek to retain digital rights in future for use on its own platforms, or to add them into sponsorship inventory for deals with brands?

Fifa retains certain rights for its own exploitation as well as for purposes such as serving Fifa’s Commercial Affiliates.

At the core of our digital activities are our goals to promote Fifa and the Fifa World Cup, engage with fans in a rich way, and amplify MRL and Commercial Affiliate activities surrounding Fifa rights.

Of course this is a very fluid sector and we are always exploring new ways to add value for our commercial partners.

Fifa currently sells its rights in-house with a small sales team. Has it considered working with an (in-house) agency, like Uefa does with TEAM Marketing and CAA Eleven?

In addition to our own in-house sales team, we do have such relationships where it makes sense. For example, we have an agency [Infront] who works exclusively on Fifa’s behalf in placing rights to the 2015 -2022 Fifa events including the 2018 and 2022 World Cups in 26 Asian territories.

There are benefits to both approaches, and we retain flexibility on how we will approach different territories in future.

Sponsorship

How does Fifa work with commercial partners to maximise impact, investment, innovation and ROI at the World Cup?

The traditional sponsorship rights are there; LED boards, tickets, hospitality etc and while there is huge monetary value in these elements, often the perception of impact and value comes from elsewhere. For example, it is becoming more important for many brands to have the possibility to integrate their products or services into the World Cup experience, to create unique fan engagement opportunities or to activate in new ways through social media.

Increasingly our brand relationships involve a portion of VIK to deliver the integration; we will run numerous Special Marketing Programmes with commercial affiliates on site at the 2018 World Cup as well as a numerous brand specific digital activations. These marketing programmes and activations are always most effective when they are developed collaboratively with the brand with their objectives at the heart of the concept, so that is what we try to do.

Research also plays a central role in ensuring that we continue to learn and develop the commercial offer. Fifa invests heavily in research, with much of it relevant to commercial partnerships. Later this year we will review the findings from the summer together with the brands and identify where to develop the packages for the future.

As leader of Fifa’s commercial department, how has the new administration under Gianni Infantino stabilised the Fifa brand as a commercial proposition since 2016?

Time has been spent to educate commercial partners on the changes that have been made to the way in which the administration operates and the procedures that have been implemented to support good governance in the future which helped to restore confidence.

From a commercial point of view, how do you propose to develop the Fifa brand over the next four years? Is there an overarching brand strategy, or does the commercial department focus purely on sales?

The brand is central to the commercial proposition; therefore the commercial division takes a lot of responsibility in this area working in cooperation with other departments. In 2017, we conducted a full brand audit and have already started implementing changes. One example is the launch of new Fifa claim ‘Living Football’ that was announced at the recent Fifa Congress 2018 in Moscow.

Why were three World Cup sponsor positions left unsold for Russia 2018? What changes either in inventory or sales strategy (e.g. more agency-led sales) will you put in place for the next cycle to ensure you sell out?

It was really a case of a lack of time. There was a long period where everything was on hold and consequently we only had 18 months to do the job that is normally done over 3.5-4 years. We had to prioritise and have achieved a lot within the given timeframe and have exceeded our revenue targets for 2015-18.

We are conducting a full review of the sales process from this cycle before we make decisions on the best way to approach next cycle.

The commercial structure of three tiers is already agreed for 2022 so the regional model will remain. There is a lot of value in these packages, what they offer will be showcased through the upcoming World Cup, and this combined with a longer sales period will help to deliver even stronger results next cycle.

Fifa has projected sponsorship revenues of $1.88bn for the next cycle from 2019-2022, up from $1.45bn this cycle. Where do you see the increased revenues coming from?

It is an ambitious but achievable target and I am confident that with a full sales period we will reach our goal. Indeed, despite experiencing arguably the most troubled period in our organisation’s 114-year history, Fifa will exceed its commercial targets for the 2015-18 cycle.

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