MAXIMISING THE VALUE OF EVENTS
TURNING EVENTS INTO
VALUABLE ASSETS THAT
WILL BE ATTRACTIVE TO
HOST CITIES
KEY CHALLENGES FOR NEW ZEALAND SPORT
JAMES PATERSON
MAY 2014
1
TURNING YOUR EVENTS INTO VALUABLE ASSETS
OUTLINE
1. Understand what key objectives Governments and Host
Cities have when they invest in events
2. Understand the key drivers of why Governments and Host
Cities invest in events and what sits behind the decision
making process
3. Understanding the value of an event to a Host City and the
benefits Sports Organisations will need to deliver
4. How best to engage with Government s and how lawyers can
assist Sports Organisations to maximise the value derived
from their major events?
2
KEY OBJECTIVES OF GOVERNMENTS AND CITIES
1
3
THE KEY DRIVERS FOR GOVERNMENTS AND CITIES
KEY OBJECTIVES OF INDIVIDUAL HOST CITIES
Auckland has determined four key outcomes for its major events portfolio:
1. Expand Auckland’s economy

inject new money into Auckland and minimise leakage
2. Grow visitor nights in Auckland
“Events are a cornerstone of the visitor economy
and make Auckland a highly desirable place to live
and work. Auckland has a portfolio of exciting,
distinctive events that make its people proud of
who they are and where they live. It understands
the positive social and economic outcomes events
can deliver, and their impacts on quality of life.”
 attract domestic and international visitors to Auckland and encourage them to extend their stay
3. Enhance Auckland’s liveability
 make people proud of who they are and where they live by making Auckland more interesting and exciting
4. Increase Auckland’s international exposure
 use events as a platform for promoting Auckland’s people, places and way of life to the world
NZME and the other NZ major cities have similar key objectives
4
THE KEY DRIVERS FOR GOVERNMENTS AND CITIES
KEY OBJECTIVES OF INDIVIDUAL GOVERNMENTS
Tourism and Events Queensland - Tourism and Events Queensland Bill 2012
» “ …..(b) to identify, attract, develop and promote major events for the State that —
(i) contribute to the Queensland economy; and
(ii) attract visitors to Queensland; and
(iii) enhance the profile of Queensland; and
(iv) foster community pride in Queensland…….”
» Primary drivers are therefore economic impact, domestic and global media impact
and promotion and increasing civic pride via events
» The other States and Territories are just a slight variation of the same outcomes
5
KEY INVESTMENT DRIVERS FOR GOVERNMENTS
AND CITIES AND THE DECISION MAKING PROCESS
2
6
WHY GOVERNMENTS INVEST IN EVENTS? [OVERVIEW]
THE KEY PRACTICAL DRIVERS FOR GOVERNMENT
» Visitors from outside the host destination coming for the event spending money in hotel, restaurants, bars, retail shops etc.
»
Economic Impact
» Positive promotion of the host destination to potential visitors and the ability to showcase positive imagery and key messaging
» Media and Marketing Impact
» Making the host destination a better place to work and live for local residents and increasing levels of civic pride
» Community Impact
» A positive tourist and visitor experience whilst in the host destination
» Tourism Impact
» Driving repeat visitation and word of mouth
advocacy via a positive event attendee experience
» Event Attendee Impact
Also Sporting, Diplomatic and Trade
7
EVENT IMPACT MEASURES FOR GOVERNMENT [EVENT SELECTION]
EVENT DUE DILIGENCE AND FEASIBILITY
» Bidding and securing can be a costly business for Government and Cities
» Most prefer an open dialogue and partnering as opposed to competitive tenders or “shopping around”
» They will look at the history of previous events (if any) and the levels of success in achieving their key
outcomes
» They will also look at whether the event will come anyway. The secret then for any sporting organisation is
to prove additional or incremental growth and value
» Each Government or Potential Host City will weight these factors differently
» Event Fit along with Strategic Direction is always key, as is the ability to deliver a variety of factors such as:
Brand fit
Target industry
Community
galvanisation
capability
Ability to leverage
key Government
initiatives
Potential legacies
Competitive
environment
Target audience
delivery
Cost effectiveness
and ROI
comparability
Location priorities –
regional v metro
Target Event Genre
Seasonality
Brand messaging
opportunities
Alignment with
Government policy
Ability for locals to
engage
Physical
participation
opportunity
8
MAJOR EVENT RISKS [RISK MANAGEMENT]
RISK IDENTIFICATION AND MITIGATION
» Formalised systems to identify, and systematise the risk management process
» Minimise, Mitigate or Remove Event Risk
» What are the unique key risks involved with a particular event?
Event owner risk
reputation, background checks, solvency/litigation checks, contracting entity verifiability
Reputational risk
potential political sensitivities
Financial risk
financial viability and support, who bears risk if not successful?
Operational risk
risks to participant and spectators & appropriate risk management plans
Key draw card risk
management capabilities and risk
Marketing risk
can the event form part of the wider marketing effort?
Timing risk
is there enough time to promote the event to deliver key outcomes?
Stakeholder risk
is there enough time to co-ordinate key stakeholders to ensure success?
9
DRIVING EVENT DELIVERABLES [EVENT CONTRACTING]
EVENT CONTRACTING –
A CRITICAL MECHANISM FOR MAXIMISING OUTCOMES
» Event outcomes can only be as good as the contractual mechanism that secured it
» Ensure all key areas designed to maximise event performance are covered off
» Governments and Cities tend to use their leverage as a provider of funds to insist on using their standard
contract
» Contract Template with key mechanisms including but not limited to the following:
Staggered payment
structure
Agreed use of funds &
capping
Risk management &
avoiding liability
Use of local businesses
Milestone delivery
Exclusivity
Right of review & audit
Options & last rights of
refusal
KPIs to drive event
performance
Ambush marketing
protection
Key benefit clarity i.e.
Vignettes
Marketing plan to drive
visitation approvals
10
DETERMINING THE VALUE OF AN EVENT
TO A HOST CITY
3
11
EVENT ASSET VALUATION
WHAT IS AN EVENT ASSET VALUATION?
A specialist event asset valuation service that can enable sports to maximise commercial
revenues from host destinations and turn potential event liabilities into event assets
» A number of sports simply rotate their major sporting events (i.e. nationals, schools etc.) from city to city
» As a result, a number of sports are sitting on event assets that are currently liabilities as they do not understand
the value these events can potentially drive for host cities
» Any sporting organisation that has large scale mass participation events has a potential asset that can be
potentially attractive to host cities
» Combining disparate events can create valuable event assets where they may not be one at present
» Need comprehensive economic impact and event satisfaction study to establish that value equation
» Need to independently value what an event is worth to an existing or potential host destination
KEY INSIGHTS
Economic impact to determine
the amount of new money that
is directly attributable to a
sports event
Event satisfaction measures to
ensure maximum participation
Sponsor awareness and
impact
Detailed profiling:
Socio-demographics,
Key attendance drivers
Drivers of engagement
Geographics
Consumer preference
12
GETTING GOVERNMENT TO INVEST – [PRACTICAL STRATEGIES]
UNDERSTAND THE POTENTIAL IMPACT OF YOUR EVENT
» Undertake an independent economic impact assessment of your event
» Determine the number of visitors, length of stay and average expenditure as well as
how much your organisation spends that would not otherwise occur but for the event
» Ensure your attendee database / ticketing database is of the highest capability
» Understand the Global and domestic media coverage of your event
» How your event can potentially engage with local communities
» How can you drive key Sport NZ outcomes – HP, increase participation, volunteers,
capability up-skilling etc.
» How can your event help to achieve the key drivers that Host Cities are looking for
13
EVENT ASSET VALUATION
CASE STUDY EVENT ASSET VALUATION
The ASC and Volleyball Australia jointly funded a project into their Schools Cup to the
current host destination with the objective of understanding the value and impact of
thousands of attendees drive for the host destination
» Economic impact assessment – total number of visitors, spend and length of stay
» Event satisfaction and sponsor impact also measured through the same assessment
» Maximisation of event assets
» Extension events to build scale
» Identification of available approaches to Government
» Audit of event logistics
» How best to engage Government and their Events Companies
14
WHAT DOES THIS ALL MEAN FOR SPORTS
ORGANISATIONS AND THEIR LAWYERS
AND ADVISORS
– HOW TO ENGAGE GOVERNMENT?
4
15
WHAT DOES ALL THIS MEAN FOR SPORTS ORGANISATIONS?
But what does this mean for Sports Organisations and their advisors?
» Essentially this translates to:
 maximising overnight visitation by event attendees (competitors,
officials, media, spectators, family etc.), length of stay and therefore
driving visitor and organisational expenditure (economic impact )
 maximising opportunities to promote positive brand messaging and
awareness through any event media coverage / broadcast in order to
drive future visitation (media and brand impact)
 making the host city more vibrant and a better place to live and work as
a result of hosting their events (community impact)
16
WHY WOULD A GOVERNMENT INVEST IN YOUR EVENT? – [ENGAGING GOVERNMENT]
ENGAGING WITH GOVERNMENT
» Critical to understand what their key objectives are and the
individual nuances of what their focus is upon
» Speak their language and how you can assist them reach their
key deliverables such as:
» Visitation Targets
» Economic impact, brand / media / promotional impact
» How you will make their lives easy, cost effective and
impactful – help them to help themselves
» Highlight unique and highly targeted channels that are difficult
to access (websites and databases, member/competitor
communications etc.)
» Internal buy-in and engagement first and with key people
» Address their specific needs and tailor the approach to each
17
GETTING GOVERNMENT TO INVEST- [STRATEGIES FOR SPORTS ORGANISATIONS]
ENTICING GOVERNMENT OR HOST CITY INVESTMENT
» Clearly outline the current contribution that your events are
delivering, particularly from an economic impact perspective
» Clearly show how your event can be successfully hosted in a host
city – facilities, dates, capacity etc.
» Understand who the decision maker is and engage with them to
attempt to build a relationship
» Display a clear understanding of their key objectives and how you
will assist them achieve and maximise those
» Ideally deliver a longer term solution and showcase how you can
grow the impact of your event over time to increase the benefits
» Present a clean and easy to implement strategy tailored to that City
» Understand each Government or Host City’s unique circumstances
18
THANK YOU – [QUESTIONS]
QUESTIONS
EUROPE
AMERICAS
MIDDLE EAST
ASIA PACIFIC
GET IN TOUCH
AFRICA
REPUCOM
WWW.REPUCOM.NET
» JAMES PATERSON
GLOBAL DIRECTOR –
GOVERNMENT, TOURISM & EVENTS
»
»
»
»
P:
F:
M:
E:
+61 2 9667 0326
+61 2 9667 2587
+61 408 686 119
[email protected]
19
THANK YOU – [QUESTIONS]
QUESTIONS
EUROPE
AMERICAS
MIDDLE EAST
ASIA PACIFIC
GET IN TOUCH
AFRICA
REPUCOM
WWW.REPUCOM.NET
» JAMES PATERSON
GLOBAL DIRECTOR –
GOVERNMENT, TOURISM & EVENTS
»
»
»
»
P:
F:
M:
E:
+61 2 9667 0326
+61 2 9667 2587
+61 408 686 119
[email protected]
20