Transcript
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Feasibility Study Report:

Exploring the Potential for a Business & Events Development Service for Sport in WalesPrepared by the Funding Centre for Welsh Sports Association

1 September 2017

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Table of Contents

Executive Summary............................................................................................................2

1. Introduction and Context...............................................................................................4

2. Sports in Wales – The Sector Now..................................................................................7

Policy Context.......................................................................................................................7

View from the Sector - Consultation Survey Data...............................................................10

The Sector - Conclusions.....................................................................................................16

3. The Market...................................................................................................................17

Sponsorship........................................................................................................................18

Audiences and participants................................................................................................20

Public Funding....................................................................................................................21

The Market - Conclusion.....................................................................................................22

4. Competitor / Comparator analysis................................................................................23

Business Development Support and Interventions.............................................................23

Competitors operating in the Sporting Events Market in Wales.........................................26

5. Options for Support......................................................................................................30

Estimating the costs of support..........................................................................................34

Estimating income and measuring success........................................................................35

6. Conclusions and Recommendations..............................................................................36

Headline Conclusions..........................................................................................................36

Recommendations..............................................................................................................39

Appendices......................................................................................................................41

Appendix 1 – Experts: Selected responses from In-depth Interviews.................................41

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Executive Summary

1. The Welsh Sports Association (WSA) commissioned this feasibility study to explore the potential for the WSA to establish shared business development and event management services to its members, the National Governing Bodies of Sport (NGBs).

2. At a time when public finances are under tremendous strain and demand for the services provided by NGBs is ever increasing, something needs to be done to improve the sustainability of funding for NGBs.

3. There are some outstanding examples of significant sporting events that deliver significant revenues back to NGBs as well as furthering their strategic objectives. Unfortunately there are simply not enough of them. The successful projects do serve to prove that the potential is real but they are limited the very largest NGBs.

4. The most urgent need is therefore to support the majority of NGBs that are small.Smaller NGBs not only lack the skills and knowledge necessary to be more commercial in their approach, but many lack the fundamental capacity to deliver new initiatives without compromising core activity. This capacity challenge can be partly met by bringing in external expertise in the form of volunteers and trustees but more fundamental changes are probably required.

5. There is strong evidence of a healthy and growing market for sporting events in Wales. Whilst the economic conditions in Wales may limit the potential for sustained growth over time, there is clearly room for more activity, which is potentially profitable for NGBs. Some investment is available from the public sector although the particular stresses on local authorities are having an effect on their ability to support large-scale events.

6. The main barriers to greater levels of commercial activity from NGBs are largely internal. Most lack the skills or capacity to run complex events and do not have the governance in place with the experience to oversee such activities. A more positive and nuanced attitude to managing risk will be required if they are to succeed.

7. It is therefore important that the development of organisational skills, capacity and governance are addressed at the same time as exploring how to develop the full potential of events and other commercial activity.

8. There is a desire amongst NGBs but not necessarily the will to take on more ambitious activities themselves – a culture change is required that is also supported with higher levels of skill and expertise in commercialisation.

Possible ways forward

9. WSA is well placed to provide a range of support to NGBs:

Raising the bar – providing training, skills development etc.

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Finding talent and experience – Board bank type approach Backing winners – hands on support with strong ideas and helping get them

game ready for investment - possibly providing this investment directly Educating investors Building partnerships and facilitating collaborations and consortia

10. Trial the new service for a fixed period (12-18 months) to explore the effectiveness of

the model and to refine the offer. Performance could then be reviewed and a decision could then be taken over running the service on a longer-term basis.

11. We would envisage a service that involves an additional 2 FTE staff members to cover the various strands of the service. These could be appointed on a fixed term to align with the trial period for the service.

12. The initial annual operating budget for the service would likely be in the region of £150-200k. This would of course be dependant on the way the service is configured, but this range is in keeping with the costs of comparable services of this kind.

13. Clear Outcomes and Outcome Indicators need to be developed for any new service. This will help define success and set out the measures to be used to evaluate the progress and achievements of the intervention.

14. NGBs should be involved in the design and ongoing review of the service - this will ensure that delivery fully meets the needs of the sector, and that the offer is regularly reviewed and refined over time.

15. When mature, we would expect the service to deliver a minimum of 3-4 times the level of annual investment into the service, from revenues for NGBs as well as significantly higher levels of commercial activity amongst the wider membership.

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1. Introduction and Context The Welsh Sports Association (WSA) is an independent membership body, passionate about bringing together Wales’ major players in sport. With a membership of some 79 organisations, WSA is the gateway to business support services to empower, equip and inspire members, including National Governing Bodies (NGBs) of sport and professional associations. This Feasibility Study aims to examine the need and opportunities for helping Welsh Sporting Associations increase their income from business development, events and commercialisation activity. The context for the study is a backdrop where perhaps the greatest challenge facing NGBs over the next five years come from ongoing cuts in Government funding. Many NGBs in Wales are heavily reliant on the public purse, making their exposure to these risks both immediate and significant. This need for Sporting Bodies to become more sustainable and commercial in their approach was set out by the Minister, in his Sport Wales Remit letter 2016-17: “The Welsh Government continues to encourage its sponsored bodies and their partners to seek out additional sources of funding to supplement grant in aid and your income from the National Lottery. I welcome your approach to being more commercial and the development of a commercial strategy for sport.”1

In response to this, the WSA has sought to explore the potential for helping members increase their revenue generating capacity in the short to medium term. The WSA has set up a working group, in partnership with sector representatives, to explore the potential of a collaborative service to support income-generating and cost reduction opportunities for NGBs. Draft One of a document, which outlines the case for the creation of such a service, is now complete. However, while the document is comprehensive a detailed scoping exercise was deemed necessary to provide an evidence base for decision making. Study Objectives The client’s project team has already conducted an options appraisal and it has been agreed that the three key areas considered to have the greatest potential to meet the funding objectives are: Business Development, Event Creation/Management and Fundraising. Whilst Fundraising is the focus of a separately commissioned report, this study concentrates on issues relating to Business Development and Event Creation/Management. Consequently, the client has defined the following objectives for the study:

● Review potential / market size listing the strengths and weaknesses of the key ambition

● Consult with NGB members (contacts and introductions will be arranged by WSA)● Consult with other potential consumers of the services such as the business

community and potential customers for events● Provide a competitor analysis● Forecast potential income possibilities

1 Source: letter from Ken Skates AC/AM to Prof. Laura McAllister (Sport Wales) 24/03/2016

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● Create a robust risk register associated with the provision of the services● Forecast the potential cost to the WSA in respect of the on-going operation of this

service. This report carefully considers these objectives, referencing relevant data and evidence, prior to presenting some detailed Conclusions and recommendations for the consideration of the client. Key themes – appreciation of the brief The main purpose of this research is to explore the evidence that is available to support the case for investment of time and money into the development of a more commercial behaviour in the governing bodies of sports in Wales.

Because of the wide-ranging nature of the brief, a degree of subjectivity in the choice of evidence to review is a distinct risk. From the outset we have assumed that the approaches being explored by this commission are innovative and likely to be unique. Therefore much of the “evidence” is likely to speculative and open to considerable challenge. We have spoken in depth with colleagues in the sector before embarking on this research. We also have good knowledge of other sectors in Wales as they are rising to the challenge of generating more funding to supplement reductions in public funding.

What is clear from the current evidence base is that at the heart of the challenge is the need for Behaviour Change. Some organisations have the capacity, skills and the willingness to embrace managed risk and employ very commercial practices in the way they manage their NGB. However, these positive behaviours are likely to be few and far between. The challenge will be to encourage positive behaviour which, will in turn, deliver positive results. The reasons for a conservative attitude amongst many NGBs are complex and diverse. However much of this conservatism is built into these organisations at a structural level. The trustees and directors have a duty to protect their assets and to be judicious in their use of public money. Therefore risk-taking and investing in activities that are not immediately part of their brief to improve performance of athletes and levels of participation are avoided. Behaviour change theories can be highly complex and there are whole departments of the world’s greatest universities devoted to the process of developing behaviour change. However there are some basic principles of behaviour change theory that we can employ:

· Understanding current behaviour and motivations of individuals and their organisations· Understanding the barriers/motivations that are preventing positive behaviour· Understanding interventions that have worked elsewhere or in similar contexts· Testing interventions and evaluating their impact· Conditions in the funding environment will continue to be challenging

Without prejudicing the recommendations of this study, it is likely that any intervention that arises as a consequence will have to be considered in the long-term and will have to develop and adapt over a considerable amount of time.

The study for this report was conducted in two stages. The detailed fieldwork and desk research, which established the needs, ambitions and capabilities of a wide range of NGBs,

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was designed and undertaken by Eric Davies Associates. The final report and recommendations were researched compiled and authored by the Funding Centre Ltd.

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2. Sports in Wales – The Sector Now

Policy Context

The Welsh Government’s vision for sport in Wales was originally set out in, ‘Climbing Higher: A Strategy for Sport and Active Recreation in Wales’. This was published in 2005 and articulated the contribution of sport to the wider policy agenda and in particular, to the health of the nation, setting some ambitious targets for increased participation and elite level success.

The document was then followed in 2006 by ‘Climbing Higher: Next Steps’ in 2006; a document which outlined plans for investing the additional £7.8m secured by ‘Climbing Higher’ for the Sport budget in 2007/08 and 2008/09. In the three years following the publication of ‘Climbing Higher’ the Sport budget increased from £10.36m to £19.91m and was aimed at programmes and activities to support the achievement of the strategy’s targets. The current Welsh Government investment into Sport Wales, for 2017-18 is £22.52m.

The only policy statement on sport the Welsh Government has made since the publication of ‘Climbing Higher’, in 2005, was on the subject of elite sport. It followed an independent review in 2008 and triggered the development and publication of Sport Wales’ first Elite Sport Strategy in 2010, a document that was refreshed in 2015.

More recently the annual Welsh Government Remit Letter has served as the vehicle for setting the policy context and priorities for Sport Wales and its budget. The budget has for a number of years only provided an allocation for one financial year.

Like many other policy areas, Sport can be seen to have direct relevance and impact across a range of other key policy areas. These include:

· Business & Economy· Culture & Tourism· Education & Skills· Health· People & Communities

In addition, there are clear and wide-ranging parallels with the ambitions set out out by Welsh Government in the Wellbeing of Future Generations Act (Wales). The potential of Sport as a driver for Welsh Government policy objectives is therefore evident, and as such securing the financial sustainability and health of the sector is of vital importance.

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It is also worth emphasising the significant economic impact of Sport at both a Wales and UK level. The 2008 Study ‘The Economic Importance of Sport in Wales’2, showed that the sector made a large and growing contribution to our economy. The headline indicators were as follows:

● Consumers’ expenditure on sport in 2004 was £707 million, or 2.3% of total consumers’ expenditure in Wales. The comparable figure for 1998 is 2.2%.

● Value-added to the Welsh economy in 2004 by sport-related economic activity was £704 million, or 1.8% of Gross Value Added (at basic prices). The comparable figures for 1998 are £531 million and 1.7%.

● Employment in sport was 23,200 in 2004 compared to 19,400 in 1998, representing an increase of almost 20%. Employment in sport accounts for 1.8% of total employment in 2004 compared to 1.6% of total employment in 1998.

As a comparison, the ‘Economic Value of Sport in England’ study3, undertaken by Sport England, also emphasised the significant contribution made to the economy at all levels. Headline statistics included:

● In 2010, sport and sport-related activity generated Gross Value Added (GVA) of £20.3 billion – 1.9% of the England total. This placed sport within the top 15 industry sectors in England and larger than sale and repair of motor vehicles, insurance, telecoms services, legal services and accounting

● Sport and sport-related activity is estimated to support over 400,000 full-time equivalent jobs – 2.3% of all jobs in England.

NGBs and sports organisations play a pivotal role in driving and sustaining this activity. As such, their resilience and economic viability are key to continuing this positive trend. The efforts to build capacity through commercialisation can be seen as an integral part of this mission.

Sport Wales – A Vision for Sport in WalesSport Wales is the national organisation responsible for developing and promoting sport and physical activity in Wales. Working alongside partners such as governing bodies of sport and local authorities, they aim to encourage sporting ambitions in the young, and promote championship standards nationally.

They are the main adviser on sporting matters to the Welsh Government and are responsible for distributing Lottery funds to both elite and grassroots sport in Wales. The organisation therefore works not only to improve the level of sports participation at grassroots level, but also to provide aspiring athletes with the support required to compete successfully on the world stage.

These aims and objective are outlined in the Sport Wales Strategy, ‘A Vision for Sport in Wales’, which was produced in 2011. The document represents a very clear intent by Sport Wales, together with the sector, to deliver on the Welsh Government’s physical activity agenda and achieve sporting success at the highest levels. 2 http://sport.wales/media/346157/update_64_e.pdf3 https://www.sportengland.org/media/3174/economic-value-of-sport-summary.pdf

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Like most other public bodies in Wales (and beyond), Sport Wales faces on going cuts to their budgets, which in turn will constrain the amount of financial and capacity building support they can offer National Governing Bodies across Wales. This provides the context for why commercialisation, business development, income from events and fundraising, are increasingly being looked at as means of sustaining the sector. The National Governing Bodies supported by the WSA are varied and diverse. They range in size, budget and scope; and in their capacity to develop their commercialisation activities. Despite this, many face similar challenges and opportunities, and it was felt important that this study consider the experiences, views and opinions of the sector as part of the this analysis of how best to support future commercialisation and business development. The Welsh Sport Association – Supporting NGBs and exploring options to support commercialisation The Welsh Sports Association is an independent umbrella body that supports and represents the sport sector in Wales, including over 60 National Governing Bodies of Sport (NGBs). They categorise the ‘sport sector’ to mean anyone involved in the business of sport and active recreation in Wales. Working as a voice for the sector, they also provide a range of support services aimed at helping members become stronger, more successful and sustainable. In the recent Independent Review of Sports Wales (2017)4 it is noted that Sport Wales had agreed the Welsh Sports Association was better placed to lead on developing a commercialisation strategy for the sector and allocated some funding to them for that purpose; which is of course the focus of this report.

Indeed, the Welsh Government 2017-18 Annual Remit letter to Sport Wales explicitly states: “It is important that National Governing Bodies of Sport are also encouraged to be less reliant on public funds and to secure investment from other sources and I welcome the collaboration between Sport Wales and the Welsh Sports Association in pursuing that objective”.5

In considering the opportunities and challenges for commercialisation across WSAs membership, it’s important to note the bid differences in size, scope and status that exist between members. This is directly relevant as there are clear implications in terms of capacity, willingness, desire, and potential to undertake business development and commercialisation activity.

For example, WSA membership ranges from the Welsh Rugby Union; an internationally renowned Governing Body that is actively involved with wide ranging commercial activity (sponsorship, ticket sales, commercial sales, TV rights, etc.), through to the Welsh Tug of War Association. In considering options for improving commercialisation, the WSA will therefore need to assess where interventions are most needed, and where they can have the biggest impact (and whether a one size fits all, or tailored approach is needed).

4 http://gov.wales/docs/drah/publications/170719-sport-wales-review-an-independent-report-en.pdf5 http://gov.wales/docs/drah/publications/170518-sport-wales-remit-letter-2017-18-en.pdf

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View from the Sector - Consultation Survey Data In order to fully understand the current ‘state of play’ within the Welsh Sports Sector, primary research was undertaken by Eric Davies Associates with two key stakeholder groups. This work involved:

In-depth interviews with sector ‘experts’ Consultation interviews were undertake with a sample of sector experts, drawn from CEOs of the major NGBs in Wales, Sport Wales senior staff and Board members, Business leaders and other individuals with a specialist knowledge in the area of our research. Interviews were conducted face to face or over the telephone, using a semi structured topic guide. In total 28 interviews were completed between March and April 2017. Telephone survey of smaller NGBs in Wales To provide a broader perspective from across the sector, a telephone survey of smaller NGBs in Wales was undertaken. The interviews were conducted during April 2017 and in all, we were able to obtain 24 completed interviews. Both pieces of work explored themes relating to income, challenges for the sector and how commercialisation/business development/event activity might be best supported, with a view to increasing the resilience and sustainability of the sector. Interviewees were also able to provide suggestions on Summary findings from the in-depth qualitative interviews The summary findings from this stage of the primary research are presented below. This analysis provides an overview of the challenges facing the sector, attitudes to commercialisation and business development, as well as a range of suggestions on how the sector can best be supported moving forward. Full transcripts of interviews of interviews have been included as appendices to this report.

1. What do you see as the context for ‘commercialisation’ in sport in Wales? There was a fairly strong consensus amongst the respondents that public sector funding cuts were a major ‘driver’ behind the need for greater commercialisation. However, this was only part of the reason for taking a more ‘business-like’ approach. Respondents referred to the need to ‘manage better’, and to be more ‘customer focused’. Some went on to say that the starting point for commercialisation was, ‘looking at how we spend what we currently get’, i.e. to be more efficient. In addition, some respondents referred to the over reliance on volunteers in some NGBs, which added to the lack of stability of their organisations (hence the need for alternative funding to support paid roles). The respondents cited also other problems associated with on over reliance on public funds including ‘ring fencing’ (i.e. monies provided for a particular purpose defined by WG or the Lottery), and ‘short termism’ (i.e. the one year round of funding, which militated against medium term commercial planning).

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Despite this, respondents were able to describe a wide range of commercial activities currently in place, or actively being considered, which illustrates that the sector has already taken up the challenge. [Please see Themes 6 & 7 for more details]

2. What do you see are the main opportunities for shared services focusing on Business Development and Events creation/management?

The respondents were more varied in their responses to this theme. Some suggested the starting point for considering opportunities should be an Assets Audit – i.e. a review of the physical and intellectual assets held by NGBs in Wales that are of value to others. Others commented that high participation/high spectator sports are much easier to commercialise than others. A number suggested focusing initially on members and potential sponsors to find out what our customers’ needs are and to match our offerings to their needs – i.e. a customer focus. In line with this, it was suggested that the best place to start was to look at how we might obtain more revenue from the things we currently do – e.g. from conferences that are currently run. Some noted caution and said that developing new revenue streams was not as easy as it might seem and anything considered had to be economically feasible – it was suggested that it is all too easy to expend a lot of effort for little or no return.

Some saw the best opportunity as focusing on healthy living as a way of raising revenue and suggested running in-house programmes for corporate clients’ staff focusing on exercise and fitness. A number suggested that shared services (to deliver buying economies) might offer the best return on effort in the short run. A few referred to their Club structure and felt it was important to work with the clubs in this area because of their closeness to the members. Others felt that there is a need to generally increase the level of business experience on NBG boards (especially in the areas of marketing and customer relations) and felt there was a need to have a more up-to-date approach to information technology – i.e. to focus on Apps not web sites as a way of communicating with our audiences. Finally, it was suggested that opportunities for smaller sports were less clear-cut and in their case there was a need to collaborate and innovate.

3. What do you see are the main threats for shared services focusing on

Business Development and Events creation/management? There was a more varied response to this theme. Firstly, some respondents said that the main threat was NGBs’ lack of understanding of customers’ needs – members, potential members, spectators, sponsors and media. Others focused on the costs and effort involved in securing sponsorship and the ease with which sponsors can disengage with a sport.

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Some respondents referred to the risks associated with engaging with business and divided these risks into operational (actually delivering the agreed activity or event) and contractual (the contractual conditions placed on the NGB by the sponsor), both of which could have serious financial implications. A number added that sponsors were becoming much more demanding in terms of their requirements from a sponsorship deal and NGBs had to be aware of the kind of objectives sponsors have, e.g. to boost employee morale and engagement with the company, to support product development, to boost a brand (associations with sport, art, etc.) and to help drive customer loyalty. Others focused on issues related to the NGBs (i.e. complacency amongst the leaders regarding the need for commercialisation), to threats to sporting facilities (from cuts on public spending) to the relatively small size of Wales (i.e. 3m population), and to pressure on corporate spending from economic uncertainty.

4. What do you see as the main strengths of WSA in providing shared services focusing on Business Development and Events creation/management?

The majority view was that WSA was the right place for this sort of activity (i.e. Business Development & Events creation/management). WSA already had an advocacy role, which could be extended to the corporate world and by working with the NGBs could make a real contribution to the funding of sport in Wales. Others felt that WSA should build on the work they had already undertaken in shared services (DBS and insurance) and felt there were significant cost savings to be made in terms of recruitment, accounting, fleet, travel and general clothing etc. In particular, a number of respondents referred to the experience and abilities of the WSA team as a major strength.

5. What do you see as the main weaknesses of WSA in providing shared services focusing on Business Development and Events creation/management?

A significant minority cited WSA’s lack of experience of Business Development & Events creation/management. Others wondered where resources would come from to support such services. Others pointed out that some of the larger NGBs already have staff engaged in these activities and this would be a competitive threat to WSA. Others added that some Welsh NGBs obtained these services from their UK/English NGB. Other less frequently cited threats were:

· Possible conflict of interest when seeking sponsorship for more than one sport from the same pool of sponsors

· Too many sports in Wales simply being too small for commercialisation· The length of time needed to develop business relationships with sponsors could

be beyond the funding of WSA.

6. What would you see as the most likely form of Business Development shared services?

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Respondents were quite enthusiastic and imaginative in their reaction to this theme. They offered the following ideas:

· Develop sports based away day/team building schemes for corporate clients (public, private & third sector)

· Develop more competitions and competition based events· Design events to meet companies’ needs – employee wellbeing, team building,

relationship building with customers/suppliers· Focus on the needs of members and take a more commercial approach to the

membership list· Conduct an asset audit as a basis for business development· Use our athletes to enhance current activities for commercial benefit and to create

commercial events based on their involvement· Promote strength and conditioning training – to individuals and organisations· Look at merchandising· Develop healthy living Apps· Link to tourism (with the benefit of Visit Wales grants)· Collaborate with other sports to develop unique events· Engage with TV to get a higher profile for sports in Wales and to get a fee for their

coverage· Offer in-house training/coaching in competitive performance for corporate clients

(public, private & third sector)· Look at all the different groups in society we can involve in our events· Run summer camps where kids can get involved in a range of sports· Add a non player membership category to our membership structure to enable

non players to be involved and to raise some revenue· Improve the understanding of marketing within the NGBs in Wales· Use social media to create new sporting activities (like Street Games).

7. What would you see as the most likely form of Events

creation/management? Generally, respondents seemed to see this area as offering the most potential. They referred to:

· Building on events they currently run, such as business breakfasts, conferences,

sports festivals, etc· Bidding for International events· Creating multi sports events that meet a niche demand (avoiding competing

directly with the private sector)· Developing events that include all participating groups, gender, age, disability,

BEM, etc· Developing multi sport events such as CAST (cycling, athletics, swimming and

triathlon)· Creating multi media events mixing sport with music, food etc. (a la

Boardmasters)· Developing business focused events such as CEO Kickabout (WFA Trust and

Acorn Recruitment).

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8. Are there any other comments you would like to make? A significant minority focused on shared services (as a way of obtaining economies of scale) and stressed that this was a key way for WSA to make an immediate benefit for NGBs in Wales. Some respondents pointed to the fact that the NGBs in Wales were very disparate and that WSA should not think that a ‘one size fits all’ will work for this group. In response to this, some said that WSA must carefully target those NGBs that can offer the best return on effort, both for WSA and the NGBs in question and sport in Wales generally. Others raised the issue of where WSA is ‘positioned’ (i.e. in terms of Sport Wales, the NGBs, and Welsh Government) in Sport in Wales? Some said that WSA should look at the issue of the need for volunteer recruitment.

Summary findings telephone survey of smaller NGBs in Wales Findings from the telephone survey interviews largely mirrored the themes highlighted in the in-depth interviews. Respondents confirmed the challenges facing sporting bodies at a time of declining income from public sector sources, increased competition and challenges linked to capacity and experience. Interviewees were asked a range of questions, the full responses to which are included as an Appendix to this report. Perhaps some of the most interesting data (in the context of this study) came in response to questions on the current funding climate, the capacity of organisations to undertake business development work, and the need for additional support for the sector. The table below offers an overview of these responses: Please tell me if you agree or disagree with the following cited statements?

% of respondents

Stronglyagree

Agree Disagree Stronglydisagree

NR*1

1 “There is a realfunding problem facing our sport in Wales”

45.8 54.2 0 0 0

2 “We don’t have thestaff to mount anymeaningful business development work”

45.8 41.7 4.2 4.2 4.2

3 “There is a need fora support service tohelp us source new funds”

58.3 37.5 4.2 0 0

Another interesting question considered the current breakdown of income for respondents. This showed the overwhelming importance of public sector funding and grants, compared with modest figures for sponsorship, events and any other commercial activities.

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Can we look at how you are currently funded. In rough percentage terms how much of your income for the most recent financial year came from the following sources?

Source Mean values for the sample%

Sport Wales 30.0

Membership 35.2

Competitions & events 6.2

Sponsorship 8.2

Other (*1) 17.0

Other (*2) 4.5

Total 100.0

*1 Misc. DSW, Grants, UK NGB, WG Health, School, Clubs, Sport England*2 Self-financing, Misc.

The respondents were also asked about the forces that are driving greater commercialisation across the Sector; data that provides some insight into current attitudes and behaviour. Do you agree or disagree that any of the following factors are driving ‘commercialisation’ in sport in Wales?

% of respondents

Stronglyagree Agree Disagree Strongly

disagree NR*1

“Year on year reductions in the funding from Sport Wales”

16.7 66.7 4.2 0 12.5

“The short term nature of SW funding restricts our medium term planning”

29.2 54.2 12.5 0 4.2

“The pressure to meet non sporting goals set by Welsh Government”

8.3 50.0 16.7 4.2 20.8

“A desire for more independence on the part of NGBs”

12.5 33.3 16.7 8.3 29.2

Finally, a range of other questions explored themes of how business development/ commercialisation could support the sustainability of NGBs. Respondents offered a range of suggestions and ideas, including:

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● Grow income● Develop Business partnerships● Partnering● Attract big sponsors● Get business involved● Commercialise skills ● Create products● Better publicity

Both the consultation interviews and telephone survey responses demonstrated recognition of the need to do more to generate income through commercialisation. In addition, stakeholders were keen to receive more support and guidance to drive this activity and acknowledged there was a need to improve capacity and skills across NGBs.

The Sector - Conclusions

The evidence shows that there is a clear need for greater diversification in funding and an appreciation that greater commercialisation is needed. What is particularly telling is the key motivations for greater commercialisation amongst NGBs. It is not seen as part of the day job but as an impending necessity born out of declining public revenues. It is not seen as an opportunity to deliver a better service or improve performance. This is at odds with the larger NGB’s that are performing well, who see more commercial activity as a positive driver that will enable an expanded or more innovative service to be delivered.

Respondents have provided some clues as to the type of interventions and support that the sector requires in order to improve commercial performance. We have a clear picture of the perceived barriers to improvements amongst the smaller or less commercially active NGBs. As predicted by the brief, these barriers are largely to do with limited capacity and capability.

From a sectoral perspective, the WSA is well placed to provide support to NGBs as it has the mandate, although not the resources to undertake this support. It appears to be seen as a trusted partner of the NGBs and the logical body to deliver support in this area.

In order to explore the type of interventions that could be developed it is important to understand the market potential. Is there room for growth and is further investment really available? Are there examples of outstanding commercial performance that can be replicated, developed or expanded? The following section will address these questions in detail.

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3. The Market

In this section we will explore the wider market potential to develop and run events in Wales. We will explore the local financial and economic potential and then look at some examples of successful initiatives to understand the factors that have enabled that success.

Before we investigating the wider market though, it is worth considering the level of financial need that will need to be met by commercial activity. This will help direct our analysis and focus on the broad quantum of revenues that might be available

Direct public expenditure from the Welsh Government and the National lottery amounted to just over £41million in 2016/17. The table below shows the distribution of this funding between national and local

WG Lottery Total

Communities – local 8,399.80 6,354.50 14,754.30

Communities – national 7,930.80 4,346.20 12,277.00

Elite & performance sport 0.00 6,691.90 6,691.90

Corporate and sports development 5,327.40 1,705.90 7,033.30

Total 21,658.00 19,098.50 40,756.50 6

Given the recent historic cuts in government funding and the steady decline in lottery ticket sales, it is difficult to estimate the exact shortfalls that NGBs will face, but it conceivable that a 5-15% cut in funding is possible over coming years. Therefore, there is a potential shortfall of around £ 2 - 6 million per annum, that will have to be met from other sources. When exploring the size of the market and the revenues that can be generated, these kinds of sums will be used as the benchmark.

Market potential

If events are to be the main focus of commercial activity for NGBs then the following the sources of funding will be the main drivers of financial success.Sponsorship - is there a thriving sponsorship base that can be accessed at a Wales-wide or even UK level to help fund activity? Can businesses based outside Wales be attracted to support events in Wales?

Audiences/participants - Are there large enough audiences in Wales or will come to Wales to enjoy events. What is the nature of these audiences and do they have the financial resources to buy tickets and merchandise at the levels required to make events a success

6 Source: This is Sport Wales – Business Plan 2016-17 http://sport.wales/media/1849728/sw_business_plan_english_pdfv1.pdf

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Public funding - are there other sources of public funding that can be accessed that can help underwrite risk and provide reassurance and incentive to other investors?

It is important to explore potential within Wales in particular but also to understand how to use events to access the UK and international markets.

Sponsorship UK Sponsorship MarketSports sponsorship can be defined as the funding of sporting activities by commercial organisations as part of their communications strategies, which often include PR, advertising and marketing activities. Key Note estimates that the value of major new deals in the UK sports sponsorship market increased strongly in 2015, boosted in part by a number of major new contracts signed by Barclays Premier League clubs. Annual sponsorship spend in the UK is around £700 million. The large majority of this – around 80% – is sports sponsorship, with a further £80 million spent in support of the Arts.

Advertising and Sponsorship spend in the UK – 20137

£bn %

Advertising:

All Advertising: 17.43 95.30

Sponsorship:

Sports 0.69 3.77

Arts 0.08 0.44

Other 0.09 0.49

All Sponsorship 0.86 4.70

Grand Total 18.29 100.00

Football remains the most lucrative area of sport in terms of sponsorship deals, with the global popularity of the Barclays Premier League being the major generator of record breaking sponsorship deals. Other sporting events to attract high levels of sponsorship in 2015 included the Rugby World Cup. The sponsorship of women’s sport remains marginal by comparison to men’s sports, however, with — for example — the England women’s cricket team only having signed their first standalone sponsorship agreement in 2014. Getting an accurate picture of the total value of sports sponsorship is complicated by the changing nature of such sponsorship, and by the fact that many organisations do not report their revenue in detail. As a source of funding, however, sponsorship is often crucial to the staging of high-profile sporting events. 7 Source: Deloitte analysis on Advertising Association/Warc (2014), Arts & Business (2012), Key Note (2013)

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Football and Formula 1 racing — together — account for more than half of all sports sponsorship spending in a market otherwise fragmented across dozens of sports, each offering sponsorship opportunities for leagues, cups, teams, individuals or even stadium sponsorships. The market attracts sponsoring companies from most industry sectors, although financial services and alcoholic drinks brands are traditionally the biggest contributors to sports sponsorship (e.g. the Barclays Premier League in football, and the Heineken Cup and Guinness Championship/Pro 14 in rugby).

The Welsh Sponsorship Market

The UK sponsorship market is only relevant for the highest profile events in Wales or for the very largest sports. For the majority of events the Welsh market is going to be of greatest importance.

In terms of corporate giving and sponsorship, Wales has a number of disadvantages. Few major companies are headquartered in Wales, and so a corporate landscape dominated by branches, regional offices, and operational centres rather than head offices results in relatively small discretionary budgets available locally. There is only one FTSE 100 company in Wales – Admiral Group. There are a few other major players with a track record of supporting charities and investing in sponsorship, such as Principality Building Society, but the pool of prospects for major corporate sponsorship is relatively small. The Welsh Government noted this in the Feasibility Study for the 2026 Commonwealth Games:

Sponsorship generation in Wales has always been a challenge and probably a bigger challenge than the rest of the UK because there are not the same number of major companies with headquarters in Wales.8

SMEs are used to supporting sport at the grassroots level, but some education may be required if they are to think beyond sponsoring a jersey or advertising in a season brochure.

Very little hard data exists for sponsorship in Wales alone. In 2011 Arts & Business estimate that £6.97 million - was invested by businesses into the arts and culture in the form of cash, in-kind and corporate memberships. There is no comparable data for sports but if we assume that there is a pro-rata equivalent investment compared to the UK overall, then it is clear that the market is worth tens of millions.

Audiences and participants

If events are to be successful and to grow then revenues will be driven at all levels by the volume of participants or spectators. In this respect the picture for Wales is very encouraging.

8 Welsh Government, July 2016, Summary of Wales 2026 Commonwealth Games Feasibility Study, p9

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Sport Wales conducts research into participation in sport in Wales on a regular basis. A recent report, Active Adults Survey, 2014 – State of the Nation provides an interesting insight to adult sporting activity in Wales. This shows a steady increase in levels of participation over the last decade. As the table below illustrates participation levels have increased significantly over the period from 57% in 2000-1 to 72% in 2014.

Participation in sport (any participation in the previous four weeks9)10

% of respondents11

2000-1 2002-3 2004-5 2008-9 2012 2014

% adults 57 49 59 56 70 72

What is more, the frequency of participation is also increasing. Participation in sport and physical activity – number of occasions per week

% of respondents 2012 2014

Three times a week or more 39 41

Average of twice a week 9 9

Average of once a week 12 12

No frequent activity 40 38

In addition to being avid consumers of sport on television, we are increasingly attending major events to consume live sport. The importance of these events to Welsh life have been set out by the Welsh Government's Major Events Unit in their ten year strategy, A Major Events Strategy for Wales 2010-202012, as well as being considered by the National Assembly for Wales’ Communities and Culture Committee in their 2010 report - Making the Most of Sporting Events13. Both documents note the increasing importance and popularity of major events in Wales, and define some of the impacts and indicators that can be used to measure the difference these events make to our economy, sports participation, health and a rage of other key metrics.

In recent years, with Welsh Government support, Wales has successfully hosted and attracted some of the world’s biggest and most prestigious sporting events including the Ashes, UEFA Super Cup, Senior Open Championship, Rugby World Cup, UEFA Champions League Final, and Volvo Ocean Race. Alongside these global brands, the Welsh Government supports a thriving portfolio of other sporting, arts and cultural events, such as Hay Festival, Machynlleth Comedy Festival, and Festival No 6. The rationale and method for this support is defined in the Major Events Strategy and summarised below.

9 Interviews were conducted between 29/01/14 and 02/031510 Source: http://sport.wales/research--policy/surveys-and-statistics/statistics.aspx11 Sample size 8,156 adults, stratified to represent the 22 Unitary Authority areas12http://gov.wales/docs/drah/publications/100928-event-wales-a-major-events-strategy-for-wales-2010-2020-en.pdf13 National Assembly for Wales. Making the Most of Major Sporting Events

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Public Funding

Welsh Government Major Events The Welsh Government (WG) state that major international events:

‘…influence the way we see Wales and the world, and how the world sees Wales.’

Building a positive external reputation and brand image for Wales is an important challenge recognised by the Welsh Government. The Welsh Government’s Major Event Unit invests in a range of events in order to stimulate growth, underwrite risk or attract additional investment in events that deliver this aim. WG classifies major events into four groups: Major Events – these are peripatetic events defined by their scale and appeal to attract and influence large-scale international audiences and extensive media coverage, and to deliver economic impact and significant visitor numbers for the host destination. They can command global TV audiences and involve major international sponsors. They can have a positive impact in influencing specific market segments and in changing attitudes and behaviours. These international events are not “owned” by Wales and would have to choose Wales in the face of international competition. Examples include an Ashes Test Match, rugby’s Heineken Cup Final and the MOBO (Music of Black Origin) Awards. Signature Events – these events can also have a strong international dimension but unlike the category of major events described above they are recurring. They are also either unique to Wales or distinctively Welsh in flavour, and reflect our culture, traditions and values. They enhance the image and cultural identity of Wales and provide a high quality experience for visitors. Successful Signature Events continuously re-invigorate and replenish their audiences. Examples include established events such as the Hay Festival, the National and Urdd Eisteddfodau, the Llangollen International Musical Eisteddfod and the Royal Welsh Show, as well as newer events like the Green Man and Wakestock festivals. Mega events – like major events, these are peripatetic events with a global reach. They are distinguished by the fact that they are normally preceded by large-scale capital projects, often involving building new venues and supporting infrastructure. They involve a major bidding effort and demand a high level of government resource and support at all stages from bidding to delivery. Typically, this means the creation of a stand-alone organisation with a dedicated budget to manage the entire process from start to finish. Examples include the Commonwealth Games and the Ryder Cup. Growth Events – these are smaller events, often new, with a footprint and focus that is regional, local or sector led and which demonstrate the ambition and potential to evolve and grow to become Major or Signature Events for Wales. These events can also act as milestones in growing the capacity, experience and credibility of destination Wales, acting as a necessary precursor to the hosting of targeted major events. These will be considered for support. An important dimension of this ‘added value investment’ is in creating and nurturing home grown events, thereby supporting efforts to build a strong and sustainable events industry in Wales. Examples include the Cardiff Half Marathon.

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Major sporting events make a significant contribution to this suite of high profile events for Wales. However there is a desire to see more events being brought forward to the Major Events unit for consideration. Like many government departments, the unit is stretched in its capacity to deliver core activity and is unable to actively work with the sector to develop project ideas. Similarly it has limited capacity to develop intelligence about forthcoming opportunities. It requires the sector to bring these opportunities forward.

David Evans, who heads up Sport at the Major Events Unit was enthusiastic about any initiative that would help develop projects that could be made investment-ready for the MEU to consider. He acknowledged the limits of their remit to work with initiatives at an early stage, however, as a major investor he was receptive to involving the MEU to influence other investors or to influence project processes to the benefit of Welsh events.

Local Authorities

According to Wales online the average amount spent by Welsh councils per person fell from £39.95 in 2009-10 to just £30 in 2014-15. And it fell even further to just £26.33 last year. Total funding on sports and leisure facilities by councils in Wales is now lower than it has been for 11 years.

When population growth and inflation are taken into account, the scale of the cuts to services that have been needed to cope with the fall in spending are far greater.

This background of falling investment directly in sport also filters through to large-scale events. There is a growing threat to the sustainability of some large-scale events if they do not get the financial backing of local authorities.

The Market - Conclusion

Public funding for large-scale events is probably going to continue to decline in the coming years. However, this is not to say that it is going to disappear altogether. Most local authorities will work closely to develop successful events that drive trade and economic activity. They will undoubtedly continue to support events in many ways including with in-kind support, making facilities available and granting licenses etc.

Support by Welsh Government for Major Events appears to be very robust as the programme consistently provides support for events of the highest quality and impressive outputs. There is a clear appetite from the team at MEU to see more high quality events being proposed and it is up to sporting organisations to compete more effectively and consistently for this investment.

We know that audiences and private sector investors are not as wealthy as their counterparts in England but this is not to say that they are declining. Welsh events have done very well at attracting both investment and audiences from well beyond Wales’ borders than can help supplement the limited investment available in Wales. There is no reason to believe that more can’t be done to grow this kind of activity by NGBs in Wales.

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4. Competitor / Comparator analysis

We could find no examples of another service that provides the complete offer proposed by WSA to encompass both business development support and event management support, whether in Wales, the UK or internationally. However, we have identified evidence of direct competitors in some areas, and also comparators worthy of mention. We have also uncovered evidence of ‘substitute’ offerings.

Business Development Support and Interventions

Sport Sector● Private sector sponsorship consultancies● Welsh NGBs ‘going it alone’ e.g. Disability Sport Wales● UK/England NGBs offering this service to their Welsh counterparts (e.g. British

Cycling)● Light-touch support offered by sports councils / funding bodies and their equivalents

(Sport England and UK Sport, Sport Ireland, Sport New Zealand, Australian Sports Commission, etc.)

● Activity around the 2012 London Olympic games such as the FTSE-BOA Partnership [case study below]

Non-Sport Sector Examples of Good Practice (Arts and Heritage)● Arts & Business Cymru [case study on page 24]● Heritage Lottery Fund’s Catalyst fundraising capacity building programme for

heritage organisations● Arts Council England’s Arts Fundraising and Philanthropy programme

Case Study: the Financial Times Stock Exchange (FTSE)-British Olympic Association (BOA) Partnership14

This was a capacity building initiative spearheaded by the British Olympic Association in 2007 in advance of the Vancouver 2010 and London 2012 Olympic Games. It drew on the in-kind support and expertise of FTSE companies, which aimed to match 33 major British companies with the 33 NGBs of Olympic Sports (both winter and summer). Football and tennis excluded themselves from the initiative, apparently due to the their scale and existing wealth of commercial experience. The British Olympic Association acted as a broker, and found partners for the majority of the NGBs. Taekwondo, curling, fencing and biathlon were among the less likely candidates to have found a match.

The in-kind support offered through the programme developed along the following themes:● Access to expertise and time● Missing skills● Improved policies and procedures (board level governance)● Sounding board (advisory group)

14 Dr Geoff Walters, Bidding for Major Sporting Events: Key Issues and Challenges faced by Sports Governing Bodies in the UK. Birkbeck Sport Business Centre. Birkbeck, University of London: September 2008.

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● External advisor on board● Access to other agencies

Benefits to the FTSE 100 Companies fell into the following categories:● Personnel development● CSR● Association with the Olympics● Access to London 2012 Olympic competitors (e.g. for staff talks)● Staff motivation (e.g. G4S encouraged their staff to take up judo through the

initiative)● Staff volunteering opportunities

The companies themselves tended to view the relationship as a CSR exercise, in that they were not expecting a return on their investment. It was observed that NGBs are by their nature resource-hungry, and needed the help the companies could provide far more than the companies needed the association or benefits.15

As one example of a partnership through this scheme, Alliance & Leicester were matched with the Leicester-based British Swimming, with the objective of addressing an identified need to improve British Swimming’s customer relationship management. Alliance & Leicester staff were also able to assist British Swimming with the delivery of the 2008 FINA World Swimming Championships in Manchester, with staff volunteering at the event itself, and at other British Swimming events.

The NGBs had no rights to grant in relation to the Olympic Games and were also unable to grant rights with respect to the British Olympic team, Team GB, so this in-kind approach was a good way to maximise what collateral they was available. Some of the participating companies such as Sainsbury’s and John Lewis found ways to capitalise on the advertising and PR opportunities relating to the association with their respective NGBs (English Table Tennis and the British Equestrian Federation) without infringing on the Olympic rights holders.

The FTSE-BOA partnership was essentially a time limited campaign with London 2012 as its endpoint, but it is not difficult to see the potential for creating a similar campaign even without the Olympic ‘hook’. WSA already benefits from a similar partnership with Acorn’s Executive Search Division, who offer in-kind advice and support for NGBs seeking to recruit voluntary / non-exec board members. Would other companies working in Wales be more willing to offer in kind support and expertise if they saw it in the context of a campaign, with other successful businesses also taking part.Case study: Arts and Business Cymru

About Arts & Business Cymru: BackgroundArts & Business grew out of the creation of the Association for Business Sponsorship of the Arts (ABSA) in 1976, taking inspiration from a model pioneered in the US. As an organisation, it was almost entirely core funded by the Arts Council of England for the majority of its history. Funding for the work in England came to an end in 2011 (a casualty of the policy drive for austerity), and it has since merged with Business in the Community. However, the offices in Wales, Northern Ireland and Scotland set up as separate charities, and received funding from the devolved governments in those nations. Arts & Business’s core funding from the Arts Council of Wales came to an end in April 2016. 15 Stephen Morrow and Leigh Robinson. “The FTSE-British Olympic Association Initiative: A resource dependence perspective.” Sport Management Review. Vol 16, 2013. pp 413–423.

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ProgrammesArts & Business Cymru’s work has two main strands: building capacity and resilience in the arts, and promoting business sponsorship. Its core offer includes

● Professional Development Programmes. A service matching volunteers from the business community with arts organisations in need of their skills (mentoring and coaching, board placements, and other pro bono placements)

● A sponsorship brokerage service● Awards to recognise and promote business sponsorship of the arts● Capacity building and training opportunities for arts organisations

Arts & Business Cymru have also created and administer a sponsorship match funding scheme (“CultureStep”) funded by two local foundations, and an arts fundraising internship programme, which has been funded by a range of statutory funders and foundations over the last 4 years.

Structure and Business ModelArts & Business Cymru’s business model is a membership organisation, with approximately 70 business members and 160 arts members. It is registered charity and company limited by guarantee, with a wholly owned subsidiary trading company.

In the past 5 years, the organisation has helped 273 arts organisations to improve their skills and income generation, and assisted 129 business members to meet their own business objectives by engaging with the arts. Among its achievements, it has levered over £1.5 million from businesses to the arts in Wales and has brokered 120 business / arts partnerships. Last year the value of the in-kind or pro bono support provided by business members to arts organisations through the Professional Development Programmes was more than £500,000.

Although it is impossible to know how much of the investment in the arts in Wales should be attributable to Arts & Business Cymru’s intervention, it is clear that the organisation has succeeded in the valuable work of:

● Educating businesses and ‘the market’ on the value of partnering with arts organisations

● Equipping and supporting the workforce of Welsh arts organisations in a number of key areas such as sponsorship, and in many cases educating them on the need for a professional approach to governance, marketing, communications and fundraising

● Attracting and levering new investment to the sector from business

Competitors operating in the Sporting Events Market in Wales

● Welsh NGBs (including Football Association Wales’ successful bid to host the 2017 Champions League final, Welsh Athletics spin-off Run 4 Wales [see below])

● UK/England NGBs● Major private sector events companies and competitions (e.g. Ironman, Volvo Ocean

Race, Extreme Sailing Series, etc.)● Smaller private sector events companies (e.g. ‘Invincible’ at Margam Park, Always

Aim High Events, and RunWales, organisers of the Conwy Half Marathon and other North Wales road races)

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● Charities (e.g. Kidney Wales’ partnership with Run 4 Wales)● Clubs (e.g. Glamorgan Cricket)

Case study: Run 4 WalesAbout Run 4 WalesRun 4 Wales is non-profit sporting event management company delivering more than 15 major road races in Wales, including the Cardiff University Cardiff Half Marathon and now Velothon Wales from 2016-2018 (taken over from Ironman on a license agreement). Its objectives are• To promote, manage and deliver events in Wales• To build event management capacity in Wales • To prepare bids for Major Events to be hosted in Wales• To promote Wales as a sports tourism destination• To support the running community and race organisers• To support the development of “grassroots” athletics in Wales

Events managed by Run 4 Wales had 50,000 competitors in 2017. Half of these were participating in the Cardiff Half Marathon, which is the largest mass participation event in Wales and the second largest half marathon in the UK. But it is the sheer growth of the event that is impressive. Participation has doubled over the course of 7 years from 11,000 running in 2009 to 22,000 in 2016. 25,073 have already registered for the 2017 race being held on 1 October, again breaking the previous record. The number of spectators has also more than doubled from 20,000 to more than 50,000. The media coverage of the half marathon by the BBC and Welsh press, its traction and shareability on social media, and the high volume of spectators make it particularly attractive to potential sponsors.

Run 4 Wales StructureRun 4 Wales is a separately constituted social enterprise and company limited by guarantee. It was set up by Welsh Athletics to manage the risk of managing major events and to limit liability in the event of Run 4 Wales making a loss. Welsh Athletics is a director of Run 4 Wales and has one seat on its Board, but does not have significant control of the company, in order to maintain the separation of the two organisations.

The Run 4 Wales Charitable Foundation is the charitable vehicle of Run 4 Wales and is a separate entity from both Run4 Wales Ltd and Welsh Athletics (who many nominate up to two trustees of the Foundation). Its charitable object is to promote community participation in healthy recreation for the public benefit in Wales. So far, the Foundation has provided a grant to the Welsh Schools Athletic Association to support participation at National and International competitions, and also to fund a National Support Officer whose role is to support and develop the schools work. The existence of a charitable vehicle may allow Run 4 Wales Ltd to operate more tax efficiently (not least enjoying an 80% business rate relief on its premises), and may also encourage corporate donations and sponsorship. In the most recently available financial year (Jan 15- Oct 15) the Foundation received £256,922 in donations, which were presumably mainly given by Run 4 Wales Ltd. Case study: 2015 World Orienteering Championships, Inverness Orienteering is a niche sport most popular in the Nordic countries, but it also has a home in Scotland at the Scottish Orienteering Association base (the National Centre at Aviemore).

Event Scotland invested hugely (relatively speaking) in helping the Scottish Orienteering Association to host the World Orienteering Championships, providing £280,000 towards an event that does not raise any commercial revenue for organisers through ticketing,

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sponsorship income or broadcast rights fees. The investment paid off, however, generating an economic impact three times greater than was initially (conservatively) forecast. The Scottish Orienteering Association’s trading subsidiary the Six Day Event company directly managed the event. Although the organisers were disappointed that sponsors could not be found16, the event was tremendously successful in other respects:

● It was estimated to have an impact of £9.4 million on the Highland economy, attracting more than 8,000 participants and spectators from more than 50 countries. (Most of the participants and spectators were from Northern Europe, especially Scandinavia, a target market for Highland outdoor tourism.)

● It helped the Scottish Orienteering Association to make a profit of £30,000 (which in this case was reinvested in the sport itself)

● The Scottish Orienteering Association were also able to attract new volunteers and members, growing participation and membership by 20% through 2015

(As an aside, the Scottish Orienteering Association is a charity registered in Scotland and its charitable status has enabled it to attract funding from Scottish trusts and statutory sources, and to use the World Championships as a vehicle for their outreach and participation work.)

Although undoubtedly there are other examples closer to home, this case study is a good example of what can work as a way of generating income for a NGB in an almost unknown sport whose primary audience is outside the UK. It also highlights some room for growth and potential missed opportunities that perhaps could have been seized with better or longer-term support in terms of business development and event management, and more investment in organisational development. (The organisation has begun to address this by creating a Chief Operating Officer position, but it continues to rely heavily on its voluntary board of directors and other volunteers for business development activities.)

Major Events Funding: Sport England Major Events Bid and Legacy Fund 2017-2021DCMS’s current sport strategy, Sporting Future (December 2015), notes that in England there is no direct equivalent to the support available for developing major events bids offered by the devolved governments in Scotland, Wales and Northern Ireland. The need for more support was raised in their latest consultation, and it was felt that English venues were being put at a disadvantage. Therefore Sport England is now establishing a scheme, alongside the existing major events engagement fund, to support English bids for major sporting events. A fund of £2 million is being offered to help NGBs with major events, with the objective either of supporting innovative business models and better income generation, or to help develop programmes to engage less active local people in sport or physical activity around the event.

Through the first objective, Sport England is hoping to work with NGBs to test the commercial opportunities around major events already being exploited by major sport clubs, commercial leagues, and other countries. This could involve testing:

● Developing innovative ticket packages● Priority booking● Pay per view event streaming● Upselling and cross-selling onsite and through ticket packages● Developing onsite experiential opportunities

16 The World Championships in 2016 (Estonia) and 2017 (Sweden) did find a headline sponsor, the Finnish company Nokian Tyres.

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From a Welsh perspective, this initiative should hopefully provide some interesting case studies and learning that can be replicated in Wales. This initiative addresses one of the key issues around risk that NGBs face -- simply that they often cannot, or perceive that they cannot, afford to take on too much risk in trying innovative commercial approaches. It should also be a salutary reminder that Wales cannot afford to rest on its laurels in a fiercely competitive major events environment. Welsh NGBs usually cannot compete for bids internationally because they are not part of the international federation, so the direct competition is within the UK under the auspices of Sport UK.

International ExamplesIn terms of NGB capacity building, we looked at public sector sporting bodies and federations in a range of other countries including Sweden, Canada, Australia, New Zealand and Ireland, and found a few examples of light touch capacity building (e.g. online toolkits and information sheets) but nothing more substantial.

In terms of events, most of the examples we found came directly from the Sports Council itself. For example Sport New Zealand has recently launched “the New Zealand Sporting Events System”, an apparently top-down strategy to ensure joined up event planning from the local community level to mega events.

In Australia, a great deal of sport development and infrastructure has developed at the State level as a result of its Federal system of government. The result is that, for example, Sport New South Wales (and its member sport governing bodies) may have different policies and programmes to Sport and Recreation Victoria (and its member sport governing bodies), and they compete against each other for major events. At the national level, the Australian Sports Commission’s agency for elite / high performance sport is the Australian Institute for Sport, and the Australian Government’s Department for Health’s Office for Sport coordinates major events. With so many public sector organisations involved in sport, perhaps it is not surprising that there does not appear to be a single coordinated response to the challenges of event management and business development facing state or national governing bodies.

Competitor Analysis: Conclusions

There appears to be a wide range of support models in existence across sectors and even with the sports arena. No single model seems to have taken hold as the blue-print for success. This would seem to suggest that the need for greater commercialisation and reduced levels of public funding is a growing phenomena with which not-for profit entities are struggling to address.

There are some very encouraging examples of success from which we can draw ideas and inspiration, particularly Run4Wales and the programmes for arts organisations developed by Arts & Business Cymru. However it is clear that a unique model for Welsh Sport will have to be developed and delivered in Wales in order to address the unique conditions to be found here.

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5. Options for Support In the previous sections we have explored the need and rationale for helping sporting NGBs to become more sustainable through effective commercialisation activity. In the main this refers to increased income from events, but is also interconnected with sponsorship and other commercial activities.

It is impossible to separate the ambition to develop more ambitious events and the need to improve organisational development. In order to develop skills, confidence etc. then organisations are going to be governed, advised and lead in a more commercial way. Therefore any intervention programme must necessarily view these objectives as two sides of the same coin. The NGBs supported by the WSA are varied in size, capacity and focus. It is clear that some of the larger Bodies already benefit from significant commercial activity. However, the majority of NGBs are not operating at this level and are facing significant operating risks in the short to medium term – in part due to declining public funding. Commercialisation provides an opportunity to manage these risks through diversifying sources of income and developing partnerships and activities with the potential to grow sport at all levels. Consultation interviews with NGBs and Sector Experts showed that at present, NGBs face a number of challenges that inhibit their ability to explore and capitalise on commercialisation opportunities. These include:

● Lack of capacity to develop and undertake effective business development● Insufficient skills to address the opportunities/challenges associated with business

development● Attitudes & Behaviour within NGBs – cultural attitudes to risk, change, working with

others, being entrepreneurial● Lack of development funding – money to help explore/develop new opportunities● Lack of tailored support to help NGBs develop ideas at critical times● Conservative attitude towards risk and ● Lack of capital with which to invest

Given the potential market for increased commercialisation (as outlined in Section 3) this means that our sporting NGBs are missing out on direct funding opportunities, as well as a route through which they could significantly grow their sports (profile, participation, etc.). To address this the WSA must consider how best it can build capacity within the sector and frame interventions that can make a real difference to attitudes, behaviour and outcomes. Possible Interventions could include: Changing Attitudes & Addressing the Skills Gap Training, Advice & Guidance - A programme of training, advice and guidance that helps NGBs understand the opportunities and develop the skills of their staff in a way that enables them to perform better. This could incorporate thematic training sessions, staff workshops, sector wide events, and case study sessions where leading experts could share their experiences and insights. This would be a generic service across the sector aimed at lifting standards across the board. Key to this work would be achieving a change in attitude and

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behaviour through highlighting opportunities and giving NGBs practical advice on how to manage any risks involved. Giving NGBs the Capacity and Confidence to Succeed Tailored Support Service. A tailored support package for a limited number of NGBs to work up identified commercialisation/event opportunities. Specialist WSA staff would work alongside NGB staff to develop project ideas and take them through to fruition. NGBs could be asked to apply for a limited number of Support Packages; which would allow WSA to target their resources, set some clear criteria for the intervention and manage the expectations of members. Expertise could be provided directly by WSA staff or bought in via expert suppliers such as successful NGBs or professional services such as accountants and lawyers Mentorship & Volunteering Programme. NGBs may lack capacity and expertise to develop a new approach to commercialisation. WSA would build on its current Board Bank model to match NGBs with individuals with the necessary skills and expertise to support the development process. This could also be extended to cover Volunteers who may have a personal/professional interest or expertise in Commercialisation activity and who want to gain experience/contribute through working with a NGB (event management, marketing, fundraising, branding, etc). Development Grants. NGBs may require modest amounts of funding to explore opportunities and develop their ideas. WSA could operate a small grant scheme to facilitate this work; which in turn would open up a dialogue with Organisations considering new events or commercial activities. Any schemes with a significant potential could then be signposted to other support agencies and, if appropriate, be flagged up to the Welsh Government Major Events Unit for more intensive support. This funding could be used to incentivise more positive behaviour, such as encouraging Welsh NGBs to bid for UK or International events via their UK associations. Growing the Market Educating Business. The WSA should continue to promote and educate the benefits to business of working with NGBs and sporting organisations. This may involve identifying and developing new business prospects and providing NGBs with introductions and access to those companies (through events and networking opportunities). WSA Brokerage Service. The WSA has a well-established advocacy role on behalf of NGBs in Wales. As such they would be well placed to nurture and grow relationships between the sport sector and the private sector – both through promoting the benefits of working with NGBs to business, and by helping ‘match make’ between businesses and NGBs. This would draw on clear examples of where this has worked in other sectors (Arts & Business) and provide a service that would add significant value for member organisations. Collaborative Support. In the same way that collaboration between NGBs and business may deliver benefits, there may also be scope to promote/facilitate greater collaboration between NGBs to explore commercialisation opportunities. Developing joint events or activities could deliver significant benefits, especially where NGBs have shared interests and/or complementary skills. However there are inherent challenges to working collaboratively in any sector, and sport is no different. WSA could again look to broker these opportunities and help NGBs through the process of working together (covering legal and financial aspects;

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providing templates for consortium working; identifying examples of business models that have worked elsewhere, etc.)

Intervention Advantages/Opportunities Disadvantages/Risks

Training ● Can be scaled according to demand.

● Can be tested initially using external experts and then brought in-house if successful.

● Can be delivered relatively cheaply to large numbers.

● Can be designed to fit most organisations as knowledge base is already quite low

● Take up could be very low as we know that capacity is an issue.

● Difficult to get the entire NGB/organisation on board if only one-or two attend training events.

● Broad based training may not take account of highly variable levels of knowledge and experience.

● NGBs must be willing to prioritise implementing the learning from the training and using it effectively, and they may need additional support to do so

Advice/Guidance ● Provide the information & knowledge needed to develop new products/events

● Share best practice and help NGBs avoid common pitfalls

● Raise the quality of practice across NGBs

● Stimulate changes in behaviour and a different approach to risk

● NGBs might not engage with advice/guidance

● Reluctance to change established behaviours

● Good advice/guidance doesn’t always lead to improvements in practice

● Developing package of advice/guidance will require an investment of time

● Programme will need to be refreshed periodically

Tailored support ● Is a positive way of getting to know an organisation

● Provide the capacity/expertise to grow projects with high potential

● Develop exemplar projects that will stimulate behavioural change in the sector

● Help NGBs overcome reluctance/anxiety to innovate

● Can be expensive and resource heavy if too much time is spent on ineffective projects

● NGBs may see the support as a means of supplementing their core budget/team, instead of an additional resource to deliver something new

● If NGB has insufficient capacity, they may not learn from the experience;

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therefore no legacy benefit

Mentorship/Volunteering

● With good matches it can potentially be a free resource and mutually beneficial for both parties.

● Helps cement positive relationships for WSA amongst business and NGB’s

● Administrative burden of overseeing Mentorship/Volunteering Programme

● Risk that Mentors/Volunteers are ineffective

● Difficulty recruiting sufficient numbers of Mentors/Volunteers

Development Grants

● Provide necessary budget to develop good ideas

● Give NGBs the confidence to innovate and trial new ideas

● Introduce competitive element to the service - drive excellence and provide mechanism for managing the limited resources of the support scheme

● Cost● Risk that funds are spent

ineffectively● Could lead to NGBs initiating

new projects simply to ‘chase the grant’

Educating investors

● Develop network of potential sponsors

● Change investor behaviour

● Increase levels of sponsorship/collaboration with NGBs

● Time consuming● May not translate into

increased levels of investment

● Limited number of firms capable of significant investment in Wales

Investor Brokerage ● Help match companies to NGBs

● Stimulate new corporate relationships

● Add value to the WSA service

● Limitations around the size of the private sector in Wales

● Saturated marketplace - risk of hitting the same companies that other sectors are also targeting

Facilitating partnerships

● Explore potential for shared services/economies of scale

● Increase collaborative projects/events

● Share skills & best practice

● Reluctance to collaborate● NGBs may have insufficient

capacity to collaborate effectively

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Estimating the costs of support.

The costs of long-term support are notoriously difficult to determine or to recommend without having a strong evidence base of the likely returns. As there are no direct comparators we have examined the return on investment for some large-scale support programmes in the arts and heritage sectors as a potential guide.

It is important to note that these programmes are aimed at developing a mix of philanthropy and commercial activity. However the blend of training and support is comparable. Unfortunately, the Heritage Catalyst Umbrella programmes, that have been running across the UK for 4 years have not been fully evaluated yet. Whilst they are showing very positive evidence of changing behaviour amongst the beneficiary organisations, they are unable to show a numeric ROI. However they are able to give us a sense of the overall costs.

● Catalyst Umbrella programmes17 across the UK, 9 projects were funded by the Heritage Lottery Fund. Average £500,000 and in Wales £650,000 over four years.

● Arts Fundraising and Philanthropy programme18 - £2 million over three years 2013-16 (it has since been extended) for a similar level of investment.

● Arts & Business Cymru - a wide-ranging support programmes focusing on skills, apprenticeships and brokering business volunteer support. The organisation’s annual expenditure is approximately £370,000 per year (2015-16), of which approximately two thirds is dedicated to staff costs (7 employees in 15-16).

Looking more closely at Arts & Business Cymru’s costs, it should be noted that the total expenditure includes approximately £120,000 in fundraised grants distributed to other recipients. Delivering the professional development and training programmes alone takes up approximately one sixth of their resources, with another sixth dedicated to the match funding programme and administering the internship scheme. (This does not include time spent servicing memberships and advocating on behalf of members, which is roughly another sixth of the staffing needs and will also contribute towards members’ overall support.)

Arts & Business Cymru report19 that the organisation has brokered 120 partnerships between arts and business and levered over £1.5 million from business directly to the arts since 2011. £1.5 million is also approximately Arts & Business Cymru’s total budget over the same period. The organisation estimates that currently £560,000 is invested from business in the arts with the help of Arts & Business each year. Another £505,000 of in kind business expertise is provided to arts organisations through Board Bank and the other Professional Development Programmes. Together this represents an ROI of approximately £3.4

17 https://www.hlf.org.uk/looking-funding/our-grant-programmes/catalyst-umbrellaA total of £3.46 million was awarded to nine Umbrella organisations to deliver a variety of capacity building services, learning and networking opportunities to heritage organisations. The Umbrella projects are currently delivering programmes of activity tailored to different geographical areas and heritage sectors.18 Arts Council England (ACE) awarded £2m over three years to the Arts Fundraising and Philanthropy Consortium to professionalise arts fundraising across England and promote the arts as a charitable cause.19 Arts & Business Cymru, Public Report to the Welsh Assembly Culture Welsh Language and Communications Committee, “Illustrating the value of A&B Cymru to Wales.” February 2017.

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(including in kind value) for every £1 spent.20 (It should be noted that the income counted in this equation is not all pure sponsorship, however; at least £120,000 of the £560,000 are fundraising and donations, e.g. for the apprenticeships programme, rather than truly commercial sponsorship.)

Catalyst Cymru and the Arts & Business Cymru are particularly helpful in giving us a guide to overall costs for a Welsh programme. This gives us a range of £160,000 - £250,000 pa.21 Interestingly, both programmes are made up of a blend of paid staff and consultant resource, which is provided on demand. Both programmes also make a modest charge for their support but training in particular is very heavily subsidised and bespoke support tends to be free of charge.

Estimating income and measuring success

As we have seen from some comparable programmes, the impact of training and support can take time to filter through into financial performance. The key measures for the early years appear to be measuring changed behaviours and improvements in knowledge.

The sample of events that are currently being run effectively by larger NGBs in Wales is very small. Even then, the most successful initiative, Run 4 Wales, delivers around £240,000 of surplus - a tremendous contribution still modest compared to the overall needs of the sport and the contributions being made by the public purse.

The evidence serves to demonstrate that events can be run extremely successfully in many different formats and models. However the sample is far too small to give us a clear indication of the levels of income that could be delivered as a direct consequence of long term interventions.

For most NGBs that will have to rely on domestic sponsors and investors and indigenous audiences and participants, the ambitions have to be realistic and developed over time.

The objective of matching the stated achievements of Arts & Business Cymru is a plausible argument. The market in which Sports and the Arts operate in Wales are very similar and the funding balance of public and private funding are also similar22.

If we apply the most rudimentary metrics of £3.4 of investment being levered into the sector for every £1 invested into supporting interventions, then this would compare favourably to the levels of investment that are raised in the third sector from various forms of fundraising. It would seem reasonable, then to set this level of investment as a target once a programme of interventions have been tested and developed.20 Arts & Business Cymru also suggested in the same paper that for every £1 of public money invested in them, they could raise another £5.80 to fund their own operations, but this does naturally place them in direct competition with the organisations that they are supporting.21 250k is 370k (overall cost) minus the 120k in grants redistributed.22 There is currently a review being undertaken by the Welsh Government into the funding of the arts in Wales.The initial phase of this is due to be concluded in the autumn of 2017.

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6. Conclusions and Recommendations

Overview

This report has sought to explore the need and potential of WSA providing a service to help NGBs become more resilient and sustainable through commercialisation activities. A backdrop of declining public sector finances and increasing competition from other sectors makes this an important issue for NGBs across Wales - something that was confirmed in consultation interviews undertaken as part of this report.

Our report has also considered the nature and size of the market for greater commercialisation, with a view to identifying the level of potential that exists for NGBs to increase income from different types of commercialisation activity - especially events and sponsorship.

Finally the report develops some options for how WSA might best support improvements in the capacity, propensity and ability of NGBs to undertake successful commercialisation activity. There are of course big differences in scale and scope across the WSA membership, and many NGBs already generate significant income from events, sponsorship, merchandising, etc; therefore a one size fits all solution is neither needed nor appropriate. In our analysis we also explore the risks, costs and possible returns from different possible interventions - including those associated with ‘doing nothing’ and maintaining the status quo. Our conclusions and recommendations therefore provide WSA and key stakeholders with a series of options for further consideration as part of this process.

Headline Conclusions

The conclusions below seek to address the objectives set by the WSA for this report, which have been listed in Section 1 of this document.

Objective 1: Review potential / market size listing the strengths and weaknesses of the key ambition

Conclusion: Whilst it is difficult to be precise about the size of the market for commercialisation in Wales (because of its complex and diverse nature), the evidence and examples provided in Section 3 demonstrate the significant income being generated by other sports, NGBs and sectors in comparable fields. Developing successful events is one area where Wales has done particularly well in recent years, both at the level of globally recognised major events and at the lower level, where new entrants to market (such as the Velothon and Cardiff Half Marathon) have shown what can be achieved in a relatively short space of time. Similarly there are some positive success stories around corporate sponsorship, both within Wales and from elsewhere in the UK, that show what can be achieved with the right product, ambition and relationships. However, it is important to

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acknowledge (though not deterred by) the very real constraints that exist here in Wales, linked to the size and nature of our economy.

Our conclusion is that the market is sufficiently large to accommodate greater commercialisation from sporting NGBs in Wales. However, to effectively grow commercialisation activity and relationships, the sector needs to improve its capacity, skills and attitude to risk, before it can improve performance. The WSA is therefore in a good position to provide this sort of intervention on behalf of the sector - working to ‘raise the bar’ across the sector, and then providing more targeted support to a small number of organisations that have the potential to achieve positive results in the short-medium term.

Objectives 2 & 3: Consult with NGB members (contacts and introductions will be arranged by WSA); Consult with other potential consumers of the services such as the business community and potential customers for events

Conclusion: The primary research undertaken by Eric Davies Associates as part of this report gave sector experts, NGB representatives and other key stakeholders an opportunity to provide evidence on the challenges facing the sector and what might help in relation to commercialisation, financial resilience and sustainability. Findings confirmed that NGBs are facing some significant challenges and that many recognise they need help and guidance to develop a more effective approach to commercial activity. Interviews generated a range of ideas and suggestions on what that support might look like and how it could work. Crucially the majority of stakeholders welcomed the proposal to offer some form of new service to improve performance. There was also a recognition that WSA are well placed to carry out that role, given their existing representative and advocacy work on behalf of the sector.

It should be recognised that not all small NGB’s are the same or have the same needs. However there is real consistency in the challenges they face.

Objective 4: Provide a competitor analysis

Conclusion: In the strictest sense, WSA has very little by the way of direct competition. Section 4 of this report provides some examples of where other organisations have excelled in the sports sector or where there have been examples of positive interventions by other agencies in different sectors, such as the arts or heritage sectors. In these examples we have found generally positive results, although it is very early in their development to draw strong conclusions other than in the case of Arts & Business Cymru. Arts & Business can make a strong argument for its very positive impact on the arts sector over time. In England it seems to have run its course but in Wales, is taking on a broader role in supporting both business development and fundraising for arts organisations. Furthermore, the culture and practice of arts organisations in Wales is often very similar to those of smaller NGBs.

We can conclude that any intervention that will directly support NGBs to behave more commercially, will genuinely be breaking new ground in the sector in Wales. However the evidence is good from other sectors that the chances of success in supporting commercial activity is likely if commitment can be made over time and is carefully monitored and evaluated so as to develop the most effective types of support.

Objective 5: Forecast potential income possibilities

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Conclusion: Whilst it is difficult to provide an estimate of the income generating potential for a new service, it is possible to make some assumptions based on examining examples of comparable interventions. Any investment in the capacity and skills of the sector to engage effectively with commercialisation activity will deliver some uplift in performance. Some outcomes will become apparent in the short term, whereas outcomes linked to more profound changes in attitude and behaviour will take longer to materialise.

The impact of the service will also depend on how it is configured (what support is made available) and how it is resourced (how much support is going to be provided, and in what form).

Based on the analysis provided in Section 5 of this report, it is reasonable to suggest that a positive financial return could be generated over time. However it is also important to stress that the service would need a broader definition of success than ‘income generated’. Some of the Outcomes will be linked to more subtle changes in attitude, skills and behaviour, and as such a wider range of metrics will be needed to fully measure progress and success over time.

Objective 6: Create a robust risk register associated with the provision of the services

Conclusion: Section 5 provides an overview of the advantages and disadvantages/risks of different service options. In our view the biggest risks are associated with the ‘do nothing’ option, as that would result in continued and increasing difficulties for NGBs. The risks associated with different delivery options can be managed, mitigated and in some cases avoided through the careful design of the intervention.

Objective 7: Forecast the potential cost to the WSA in respect of the on-going operation of this service.

Conclusion: The costs of developing and delivering a service to support improved commercialisation across WSA member NGBs would be entirely dependant on the parameters of the planned service. The options set out in this report require further consideration, so that a final service model can be resourced and trialled before full roll-out. The main costs associated with such a service would come from covering the modest staff team, the running of training sessions or events, and any development funding provided to selected events/projects.

It is of course worth noting that WSA are not starting from a zero base: they already have an experienced team, premises and extensive working relationships with their member base. This would allow certain economies of scale to be gained, and every effort should be made to keep the service ‘lean’ with an emphasis on raising capacity, advising and stimulating activity in the sector, rather than ‘doing’ on behalf of others. Sustainability has to remain the focus of any intervention and a set of clear Outcomes and Indicators should be developed, against which the success of the service can be measured over time. These should focus for the first 18-24 months on behaviours rather than results and then slowly introduce financial returns as a key measurement.

The examples of comparable services that are provided in Section 5 offer a useful yardstick of likely costs. Therefore we feel that a service with a budget of £150-200k per annum would provide sufficient resource to cover the serviced outlined, at least on a trial basis to test the effectiveness, impact and value for money of the approach.

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Recommendations

Based on the conclusions detailed above we believe there is significant merit in the WSA considering the development of a commercialisation support service that aims to work with NGBs to improve their capacity, skills and effectiveness in running commercial activities - especially linked to sponsorship and events. Key to success will be changing attitudes to risk and giving organisations the confidence and support they need to work in different ways. To that end, any new service should work to both raise the bar for the sector as a whole, as well as offering a more intensive/tailored tier of support for organisations that demonstrate significant potential.

Any new service would of course have limited resources, and as such WSA would need to manage expectations and prioritise how they provide support. We therefore feel that some element of competitive bidding for more intensive support needs to form part of the new service - whereby NGBs that have ideas can ‘pitch’ to WSA access a finite level of consultancy support and (possibly) development funding to develop their new venture. Beyond this WSA could run a programme of capacity building activity to cover key themes linked to successful commercialisation. This could take the form of training sessions, workshops, case study masterclasses, ‘meet the sponsor’ events and wider networking opportunities for NGBs to meet their peers and interested business. WSA is well placed to provide a bridge to the business sector in Wales (similar to the role performed by Arts & Business), so any service should look at how best this can be achieved.

Based on our analysis of the possible interventions outlined in Section 5 of the Report we would make the following recommendations:

Description of a service model to test - STAFF, TIERED SERVICE OFFERING, MECHANISM FOR SELECTING WHO TO SUPPORT, ETC.

1. The development of a new service to be delivered by WSA to support improved commercialisation activity across NGBs

2. Designing a service around the options set out in Section 5 of this report, namely a service that covers a mix of the following core strands:

Service Strand 1: Changing Attitudes & Addressing the Skills Gap Training, Advice & Guidance - A programme of training, advice and guidance that helps NGBs understand the opportunities and develop the skills of their staff in a way that enables them to perform better.

Service Strand 2: Giving NGBs the Capacity and Confidence to Succeed Tailored Support Service. A tailored support package for a limited number of NGBs to work up identified commercialisation/event opportunities.

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Mentorship & Volunteering Programme. WSA would build on its current Board Bank model to match NGBs with individuals with the necessary skills and expertise to support the development process. Development Grants. WSA could operate a small grant scheme to facilitate this work; which in turn would open up a dialogue with Organisations considering new events or commercial activities. Service Strand 3: Growing the Market Educating Business. The WSA should continue to promote and educate the benefits to business of working with NGBs and sporting organisations.WSA Brokerage Service to nurture and grow relationships between the sport sector and the private sector – both through promoting the benefits of working with NGBs to business, and by helping ‘match make’ between businesses and NGBs. Collaborative Support to promote/facilitate greater collaboration between NGBs to explore commercialisation opportunities.

3. Trial the new service for a fixed period (12-18 months) to explore the effectiveness of the model and to refine the offer. Performance could then be reviewed and a decision could then be taken over running the service on a longer term basis.

4. We would envisage a service that involves an additional 2 FTE staff members to cover the various strands of the service. These could be appointed on a fixed term to align with the trial period for the service.

5. The initial operating budget for the service would likely be in the region of £150-200k. This would of course be dependant on the way the service is configured, but this range is in keeping with the costs of comparable services of this kind.

6. Clear Outcomes and Outcome Indicators need to be developed for any new service. This will help define success and set out the measures to be used to evaluate the progress and achievements of the intervention.

7. NGBs should be involved in the design and ongoing review of the service - this will ensure that delivery fully meets the needs of the sector, and that the offer is regularly reviewed and refined over time.

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Appendices

Appendix 1 – Experts: Selected responses from In-depth Interviews

What do you see as the context for ‘commercialisation’ in sport in Wales?

1 The driver is reducing funding from WG. Also there’s a precedent in England where they’re much further on with commercialisation then we are.

3 [We’re already doing it.] We have a turnover of £400k pa and get about £40k from SW. A major part (about half) comes from our facility (entrance fees). The rest comes from membership fees, events, coaching courses and some sponsorship (about 10-15% of total revenue). We also make a small profit on equipment sales.

7 Commercialisation is a very misunderstood word. The key driver is reducing public sector support for sport in Wales and all NGBs need to be more efficient (cost effective) and focus on good business practice across everything we do. We need to change the mindset in sport in Wales – it has to be more commercial – players are customers.

8 We are a fairly new sport and we’re seeing massive growth and all this in the context of diminishing funding from WG. We need funds to develop our sport and we’re very committed to being as professional as we can in embracing business development.

9 We are feeling the effects of cuts and we’ve responded by bringing on a Commercial Director to our Board and appointing a general manager to look at the more business related areas.

12 There’s been talk about alternative sources for funding for 8-10 years. This (looking at commercialisation) is a positive move. DSW is a good case in point. For me SW should focus on governance of sport in Wales and WSA should focus on commercialisation.

13 SW wants us (NGBs) to be less reliant on public sector funding and to do that we need an organisation that can fulfil this role (sourcing non public sector funding) that is sustainable.

14 There’s a definite need to maximise income. We have two main funding partners and we do get some commercial income from corporate hospitality, but we could really do with a ‘real’ (i.e. major business) local sponsor/s. Another factor for us is

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that much of the facilities that we need to use are owned and operated by the Local Authorities, and they too are cutting back on maintenance, etc.

15 Funding from both WG & the Lottery is falling, but it’s a difficult situation for NGBs to think about making money. Most see their role as developing their sport in Wales and can be put off when we start sounding too commercial. This includes board members and volunteers as well as staff. I think using the term Business Development is a better way to get people to engage – it doesn’t sound so profit oriented.

16 There’s too much reliance on volunteers, we have to take more control of our own destiny. For instance, the members of the sports bodies are the customers, but very few NGBs have much of an understanding of the nature of their membership because the databases do not catch important data on individuals. The private sector are taking more and more of a share of the sports area, gyms, major events sports being run by companies, etc.

17 Our NGB is going through a major reorganisation, partly to bring us in line with the way other NGBs are structured but also to prepare us for the future. We’re taking a much more professional approach to having a balanced Board and some key officers in post. We have spent too much time running on very short-term plans and now we need to put a 5 year plan in place to take our sport in Wales forward. Commercialisation will be an important part of our thinking.

19 Working to an annual funding round makes it impossible to think about medium/long term funding – how can you generate a 3 year sponsorship deal with a company when you don’t know if you’ll have the WG money which you need as part of the overall funding of the event? There’s no doubt that sport needs to be more independent in Wales.

21 50% of our funding comes from membership and we have seen that declining, although participation is still healthy. We get about a quarter of our funding from SW and we’ve seen that declining year on year, so there’s a real threat, it’s not a crisis yet but it’s got to addressed while we still can. We have 6-7 development staff and we work with about a third of our clubs to focus on their income generation and importantly retention of members.

23 Three factors that compound the situation – 1) public funding is drying up, 2) costs are going up, 3) income generation is getting harder (just so much competition for a small pot of money). I think all sports organisations have to embrace commercialisation – or deal with the consequences.

24 We don’t get very much money from SW, about 10-15% of our income, so it’s not been a big issue for us. We just see commercialisation in sport as basic good sense. Our income streams include player registrations, sponsorship, commissions on kit sales, etc

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25 Sport is ‘business friendly’; it can reach multiple audiences – customers, employees, potential customers, the media, the community at large, etc. That’s why sport is the major target for sponsorship funding. Often, it’s all about the interests of the Chairman or CEO. Many companies just take a punt on a sponsorship offer; it’s an ad hoc thing. If you can get the right contacts and understand what the sponsoring company wants, you’ve got a chance.

26 We calculate we’ve lost £130k in public sector funding over recent years. Basically,

we’ve plugged that gap by being more commercial and it’s put us in a much better position, having a mix of funding rather than having ‘all our eggs in one basket’.

27 There’s a compounding effect – real terms cuts in public funding for SW, Local Authorities also cutting back and therefore not match funding SW’s investment and there’s likely to be more austerity measures because of Brexit. Everyone has to think about where their funding is going to come from in the future.

What do you see are the main opportunities for shared services focusing on Business Development and Events creation/management?

1 I think the starting point is to take a rigorous look at what we’ve got to offer. Obviously, we have physical sites, but also expertise and knowledge. For instance, we could offer something like the 560 programme to large businesses using SW staff working in the businesses running in-house exercise programmes.

2 Half the money we get from membership fees goes on our insurances. [Not clear whether this respondent’s NGB had taken advantage of WSA’s insurance offer last year.]

4 Firstly, expertise; we host major events such as Welsh Sports Awards, other conferences, and we should be looking at how to ‘sweat’ these to generate more revenue. Secondly, we have significant intellectual property within the Sport Wales family, such as sports psychology, etc. We do not really look on these assets other than in terms of their relevance to our core SW objectives. Clearly, such high level skills have a perceived need in the market place and therefore a value.

5 There are opportunities out there, but the key is economic feasibility. It’s pointless expending any resources if we don’t have a reasonable chance of making a margin on our activities that can be ploughed back into sport.

6 Obvious cost saving areas are insurance, recruitment, accounting, fleet, travel and general clothing etc. These are areas where buying together should give us the critical mass to negotiate lower fees. With regards to business development and events this is more complex. Probably only the medium sized NGBs who can really operate across Wales would have commercially (from a sponsor’s perspective) viable

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opportunities. It’s not as simple as it looks and as I’ve said some CEOs wouldn’t have any experience in this area.

9 For us it’s tournaments. We host European & UK tournaments and try to develop competitions for specialist groups like BME and disabled.

10 First thing is sharing services – this reduces cost. Grants are important – are we applying for all we’re eligible for? Events could be good, but there’s risk and uncertainty. Our events are not scalable which makes us less flexible. We should look at a ‘commercial’ (i.e. designed to raise money) event maybe in North and South Wales that would have participants and spectator appeal.

11 There are opportunities out there and Arts & Business have shown what can be done. But I don’t think sport has the same quality of people (in terms of commerce) as the Arts. There is a need to ‘upskill’ our people and bring in people who have the requisite skills to be able to make a difference. The NGBs, SW and WSA share the same goals.

12 Firstly, there are the physical assets – Sophia Gardens and Plas Menai, but there are a lot more across the country – look at Margam Park for instance. We need to identify all the assets we have across Wales and also to look at how NGBs can co-operate. We can and do host major events, but it’s a complicated activity and not all NGBs could cope. If you look at Run 4 Wales, they got the Velothon from Ironman because they could prove they could run such an event. Not all NGBs would be able to demonstrate that ability.

13 We don’t take advantage of the power of many – as a sector (sport in Wales) we have a significant mass, but we don’t use that very effectively in getting better deals from our suppliers. Looking at Business Development, I think the starting point is an assets audit – ‘what have we got that can be used to develop business?’

15 We are aligned with our British counterpart and have effectively sold our rights to them in return for a share of a major sponsorship deal. Having said that; we do have some assets like the track team, awards dinner, etc that could be sponsored. We are very interested in exploring sports/businesses partnerships.

16 I think we need to look at where working together (i.e. all sport in Wales) we have much better buying power and can obtain better deals on the sorts of things we all have to buy. Also, we have to create a sense of ambition in the sport – there’s too much fear of failure, which is inhibiting the development of business development initiatives.

17 We have a network of over 100 clubs and there are some really good and innovative things going on with some of them. We have one club that has raised over £1m from a range of activities based on our sport but focusing on the needs of the community, such as young offenders, ex service personnel returning to civilian life, etc.

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18 Ours is a spectator sport and we’re not exploiting the potential at this time. Also, there are opportunities for cost savings through group buying.

21 This is quite difficult for as and we’ve thought long and hard about it. We have 150 affiliated clubs and run 30 national championships (all ages, etc) a year. We run coaching schemes, send teams to Europe for competitions, etc. But there’s a real break between the amateur game and the professional game and the professional game is dominated by big, commercial organisations.

22 There are lots; just focusing on shared buying could help the sector greatly. The DBS service has been good and that shows it (i.e. shared services) can work, we need to build on that.

24 Before anybody looks for opportunities they’ve got to realise that sport is competing with a lot of other activities for the same leisure £1. So we’ve got to have the right quality of offering, quality of service and promotion - they have to be able to compete.

27 It’s very challenging for sport. I would say there are two areas – 1) operating more efficiently; and 2) selling (exchanging goods and/or services for revenue). Both, I think, are equally important. Take the first one, all NGBs are likely to want to use social media to communicate with their audiences, it shouldn’t be that each one does it themselves, there should be a central unit to co-ordinate this activity for sport in Wales. This would reduce costs and have a more professional service. There are many other areas that could be treated in this way – travel, audit services, etc. Looking at selling, we have to remember there is a cost to selling and NGBs need to be sure that the revenue they generate is worth the cost and effort involved. Also, we need to be ‘smarter’ – e.g. web sites are just about obsolete now, but I bet all NGBs have them and maintain them. The smart way is to develop Apps. I’d also say that there’s not enough private sector talent on the Boards of NGBs. Finally, I think sport in Wales needs to look at its branding. Should we have a common brand for sport in Wales, e.g. Team Wales, rather than many individual sport brands?

28 I would say, firstly, focus on ‘upskilling’ your executives across the sector in marketing and customer related areas. Next, I’d say you have to understand what motivates companies to spend money on sponsorship. The key drivers are marketing related – targeting particular customer groups, repositioning the brand, etc, community engagement (CSR) and staff development/training.

What do you see are the main threats for shared services focusing on Business Development and Events creation/management?

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1 The main threat is the lack of knowledge regarding what companies etc need. We need more commercially experienced people in SW and the NGBs. Without this sort of change we will not be able to create a successful commercial operation.

4 It starts with the CEOs of the NGBs. Basically they face three key challenges: 1) Replacing revenue faster than they are losing it, 2) How to compete with mass market sports (rugby, football, etc) and 3) Developing new ideas about how they operate from engaging with new expertise. At the heart of this problem is that the vast majority of these people came into sport (and rose to CEO level) because of their passion for their sport and many feel it is not their role to worry about where funds come from. Some even see talking about new funding streams as ‘selling out’. Having said that, there is evidence from a recent study that some appreciate the threat that reducing funding from WG poses to sport in Wales in general and their sport in particular. It is not unreasonable to say that some sports NGBs could face extinction if they do not respond to this issue.

5 We’ve had experience of deciding that an event was viable in operational terms but not in terms of the contractual conditions that we were being asked to accept. In that case we needed to negotiate an alternative contractual format that better suited us whilst still meeting the sponsor’s needs. This type of negotiating takes some high-level commercial experience and knowledge.

6 Lack of commercial awareness in the sports sector in Wales. Businesses aremuch more aware that sponsorship is a business investment and as such much deliver to their needs. The bigger the business the better they are at measuring return for their investment and more demanding from those who seek sponsorship from them. Issues they look at cover risk register, confidentiality, ability to deliver (do they have the experience to do this?), financial security, etc. With events it’s a much more fine tuned approach – one model does not fit all. Large NGBs are probably already doing this sort of thing and therefore have staff in place – a competitor to WSA - and the small NGBs would be hard pressed to find something that is commercially attractive to business. Also, some NGBs are aligned with their UK counterpart for business development and events and this is a competitive threat too.

7 I don’t see any threats – obviously we have to take a due diligence approach but that’s all.

8 In major events, the main threat is the underwriting costs. We’ve already had problems with this issue on some of the events we’ve tried for. Also, there is competition from other parts of the country (UK) and the world when you start focusing on international events.

12 For big events there is a real threat of losing money. Basically, you have to focus on the economic viability of the event and consider its risk profile before entering into any contract.

13 Complacency. Too many CEOs (of NBGs) haven’t woken up to the threat of reducing funding and what needs to be done sooner, rather than later to avoid a crisis. And SW has to take some of the blame for this, as they haven’t really shown any leadership regarding dealing with this problem (reducing public sector funding) -

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it’s a bit like climate change. That’s why we need a body like WSA to take on this role of being a focus for commercialisation and changing attitudes in the sector.

14 Well we’ve talked about public sector cut backs, but it’s also the nature of where we are. There are about 3m people living in Wales and our NGBs are therefore relatively small. Having said that we’re expected to deliver the same governance duties as the much bigger NBGs in England. This means that my time is spread really thinly over a range of activities – including commercialisation – and there are times when I just don’t think I’ve got enough time to assess the risks in any initiative we consider, so we don’t do it. This is where WSA could make a real contribution.

15 We need to be able to professionalise events – the private sector is a competitor for us and they’re really good at this. Also, we are a bit insular and don’t always find out about opportunities.

16 Developing business development ideas and events is hard work and sometimes for not a lot of gain. This discourages CEOs from getting involved. Also, there are serious financial risks – if an event fails, who’s going to pick up the tab? Again, this discourages CEOs. However, there are ways to mitigate such risks like the Invest to Save scheme (WG). There’s a general lack of knowledge about commerce in SW and the NGBs. Also, we have to be careful about creating an appetite that we can’t satisfy – we have to think about managing expectations. Finally, there’s a threat from the private sector stealing our ideas.

20 I would describe them as limitations, rather than threats. To take advantage of the strength and profile of the UK body we have to give up our rights to our databases. For us, we had to do a cost:benefit review and make our decision on that basis. Needless to say, it was overwhelmingly in favour of partnering.

22 Having a clear differentiation of SW from WSA. Also, trying to grow these activities too quickly and making a mess of it.

24 Promoting even medium sized events carries a financial risk. You can spend £70k to get £150k revenue return, but if it fails, you could be facing a £70k loss. Without reserves to cover this, most NGBs would be unlikely to get involved. SW seem to be mostly focused on performance at the Commonwealth and Olympics games, so there’s not a lot of support from there.

26 There’s always a risk in getting involved in more financially oriented activities. One issue is return on effort – we say we have to have a spend : revenue return of 1 : 3; e.g. if we spend £10k, we expect to get back £30k. We have taken on the approach of some of our commercial partners and put business development on a commission basis.

27 I think the main threat is developing a consensus amongst the NGBs in Wales. This is going to mean thinking very differently from the way they’ve thought in the past. A good example is meeting some of the objectives WG set such as physical literacy – it would be really good if sports in Wales could offer a ‘taster’ programme for kids to try different sports. This would have many benefits – for Government, the community and the sports themselves.

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What do you see as the main strengths of WSA in providing shared services focusing on Business Development and Events creation/management?

1 I see them as a neutral organisation and therefore a good place to host a commercialisation initiative.

3 I don’t know, would they be able to source sponsors for us? We’d be interested in that and we’d pay a commission; I think the going rate is 10-15% of the sponsorship deal.

4 They already provide a shared service (DBS) and it seems to be working quite well for the NGBs. WSA looks like the right place to put business development and events and leaves SW to concentrate on their declared (predominantly sports related) objectives – therefore no conflicts.

5 I would say that WSA have the right mind-set to undertake these sorts of activities.

6 They have the right functional role but there hasn’t been a lot of success in the shared services they’ve tried – take insurance broking, only some NGBs signed up to the WSA deal. Having said that, when you look at the number of people from sport in Wales that are travelling around the world it would suggest to me there’s a real opportunity for operating a shared travel/accommodation offering. This would really benefit most NGBs. For me, the right approach is to get agreement internally (i.e. within the WSA membership) before approaching agencies for quotes – that way getting the best commercial deal. This would also create confidence in WSA on behalf of NGBs.

7 I think WSA are well placed to act in this role. We need a strong, well resourced WSA providing a locally based service to Welsh sport.

8 I see WSA as having resources that can be combined with our in-house resources to achieve our goals. I think we’ve got some very good ideas for events, etc but we have to focus on Performance & Development as well as commercialisation – help from WSA would be great.

9 SW have been talking about other sources of funding but they haven’t done the job they should have done. I welcome WSA taking on this role and bringing some focus to this issue. We’ve had a pretty torrid time with funding over the last few years and it only seems to be getting worse.

10 There’s a natural division of labour here, NGBs are good at sport, WSA needs to be good at revenue generation.

11 WSA is the obvious place for this (i.e. commercialisation) to sit and the General Manager has a wealth of experience in this area.

12 WSA is where this function needs to be, not in the NGBs, so they can take the pressure off the NGBs regarding commercialisation.

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13 They let us speak with a collective voice (advocacy), they provide a unique source of support for NGBs in Wales and the have the potential to be an agent for change in the sector; to articulate a compelling reason for change.

14 They are independent and focused on NGBs in Wales.

15 For me WSA would be the best place for this activity. There’s no conflict of interest, there’s already a culture of sharing, which is good considering how competitive we (i.e. NGBs) all are!

16 I think there’s a real passion and commitment to make a difference and a vision that sets a framework to implement this initiative for the good of Welsh sport. Also, the skills set and experience Vicky brings to the table.

17 They already facilitate sharing forums and would seem to be the right place for this kind of activity.

18 We already get our insurance from them as part of a group buying scheme and this demonstrates they can do this sort of commercial work

20 I just don’t see the necessary commercial skills in most NGBs and I don’t think many of them could, even if they wanted to, develop them. WSA sit in the perfect place to fill this skill/experience gap.

22 WSA is independent, member centred, with no bias. Well connected not just with the NBGs but across other parts of the economy. It’s a small team, but very effective.

23 Their work in advocacy for sport in Wales. They can promote the worth of sport to society, not just what we all think of, medals etc but the value of sport in developing young people, contributing to a healthy society, etc. Also, WSA is the focal point for better joint working in sport in Wales, with a focus on sustainability – not just financial, but training and development. They have a young team and are adaptable and ready to take on this challenge.

24 They provide a DBS service and can develop generic services that all NGBs are likely to use.

25 I don’t think there are enough marketers involved in the management of sport in Wales and WSA do have someone who understands sports marketing. NGBs in Wales could benefit just from someone attending meetings with potential sponsors – to act as an ‘interpreter’ between sport and business. That would be a major strength on its own!

27 Any activity that is being duplicated by NGBs should offer WSA an opportunity to provide a benefit to NGBs. WSA needs to operate more efficiently then the NGBs and that’s about developing effective, standardised processes.

What do you see as the main weaknesses of WSA in providing shared services focusing on Business Development and Events creation/management?

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1 In-house commercial experience is key and I suspect they don’t currently have a lot of that in-house, so they’d need to buy it in.

4 Starting from a low base in terms of business development and events and also the attitudes of CEOs of the NGBs.

5 NGBs will be doing some of this for themselves (if they’ve got anything about them) and also Welsh NGBs often work with their UK counterparts including matters associated with commercialisation. This situation would pose a competitive threat to WSA. In addition, there are some strong players in the sponsorship areas like Engage Sports and The Sports Consultancy to contend with.

6 Why would an NGB who currently has a commercial structure in place, specific to their needs and only delivering to their needs, drop that and sign up to the WSA scheme?

7 They need to be truly independent and they lack resources to fill the role we are talking about (Business Development & Events creation/management). Having said that, they could augment their resources by using external sources – outsourcing certain activities, but still managing it. I see real benefits from shared services taking advantage of economies of scale.

8 There could be a conflict of interest – e.g. where two sports are targeting the same sponsor. Also, given the breadth of sport in Wales, they (WSA) would have to guard against spreading themselves too thinly.

10 There’s no expertise for this activity in-house at present.

11 Some of the NGBs have already taken commercialisation on board and actually employ people to do this kind of work. WSA would meet some resistance from such NGBs who would not want to lose a resource committed to their sport only. There is also the fact that some sports are just too small to have a realistic chance of raising very much private sector money. I think WSA have to be realistic and focus on those NGBs that offer a real opportunity for commercialisation.

12 We’re starting from a low base in commercialisation in sport in Wales. There are some good things happening in different areas, but you wouldn’t say we are the finished article. We need more expertise on board, more successful events under our belt. It’s hard to build a new event – one that will have the potential to be a fixture in the calendar for a number of years.

13 Looking at Events, we know that at some point the issue of who pays for failure will come up. And in addition, there will be cash flow issues – you need to spend on events before you bring in any revenue. Where is this working capital going to come from?

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14 How are they going to resource this service? We’ve talked about austerity measures already and I can’t see that WSA would be in a better position then the NBGs as far as getting money to set this up and run it.

15 I think it’s very important that there is fairness in the way money comes into sport in Wales. It does seem to be that some can do what they like and get the lion’s share – there’s got to be equity in the system.

16 Limited financial and human resources. WSA is not really seen as stand alone, regardless of how it is set up.

17 They need to own the expertise and to be able to add value.

18 I imagine there will be issues around where will resources come from.

19 It’s a real worry that moving into this area (hosting Business Development and Events creation/management) may mean that they spread their sources too thinly.

21 I just don’t know if there’s enough out there (i.e. in terms of what NGBs in Wales can offer) that will be commercially attractive – particularly now companies are so hard-headed about how they spend their money.

22 A lack of track record in doing this type of thing, but there’s a lot of commercial experience in WSA that could benefit the NGBs.

23 I don’t think they have the experience or resources to run major events, but that’s not necessarily what they should be aiming to do – you can always bring in a professional events contractors if the numbers stack up.

24 I think they will encounter a lot of difficulties. For instance, we use our UK governing body for safe guarding courses, not WSA. WSA will meet competition from this area. When you think about sponsorship or mounting a medium/large event, wouldn’t an NGB go to a specialist commercial firm with a strong track record?

25 To be successful in this arena (commercialisation), you have to be prepared and able to invest in building long term relationships. WSA are starting from a low base in this area and also where are the resources going to come from to build this type of expertise?

26 First off, how do you service the needs of such a diverse group of customers (i.e. NGBs of various sports in Wales)? I think this is quite a daunting task. WSA should look at their shared services idea first – you could make some big wins, and enhance your reputation, just by taking advantage of the critical mass of Welsh sport in negotiating better buying terms (for a range of products and services).

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27 Again, I don’t know them well enough, but it seems to me if NGBs want more independence from the public purse (and they should) then WSA has a role to play; it means sorting out roles and responsibilities, which could take some time.

What would you see as the most likely form of Business Development shared services?

1 I think we could look at away days/team building sessions etc which are very popular with a large number of organisations, not just the plc’s. Again though, I have to stress WSA must engage with potential customers to understand their needs, not only is that key to getting these sorts of ides off the ground but also in developing other ideas matched to customers’ needs.

2 For us it’s been competitions. We run two a year (winter & summer) and cover four age groups. The events run over a weekend. It mainly attracts Welsh members but we do get some English clubs who compete (the winter competition is classed as an open event). I don’t know if there’s anything more we could do in this area?

4 From my experience the main source of business development is corporate sponsorship. Companies sponsor for four reasons – to boost employee morale and engagement with the company, to support product development (e.g. Under Armour), to boost a brand (associations with sport, art, etc) and to help drive customer loyalty (shared values, belonging, etc). Consequently, to have a business development function we must focus on delivering VALUE. Generally, to do this you have to have a structure that covers account management (on-going relationships with sponsors), on-going communications activity, PR function and events management. If you take Glamorgan Cricket for example, they had all these functions in house and in addition had a strong link with ECB, Lords and MCC, which significantly boosts their profile and access to sponsors.

5 You could look at sponsorship for awards presentations, etc. Also, we should engage more with UK Sport, as they are interested in bringing events to the UK and that includes Wales.

6 Sponsorship is hard to do and needs professional support to get it right. Whether its cash or value in kind or a mix, there’s a lot of negotiation and you need to know what other sports or other activities are delivering for the same money. Working with sponsorship agencies you need to understand what benefits they are offering you as well as what we are offering them. In my experience it can take 6-8 months just to get to understand one another. I’m not sure much of the sports sector in Wales is ready to understand sponsorship – the importance of a brand, etc. Companies are now really good at knowing what they want and how to measure return. WSA would have to be very good to be able to guarantee to meet the current level of sponsorship received by some of the bigger NGBs. Also, there are issues of ownership of territory (actual physical area covered, Wales or North Wales, etc) and activity. Sponsorship is quite different from fund raising.

7 I see a focus on members and sponsors as key to business development. We have to create better communications and marketing.

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8 We own our membership list and one of the objectives for us now is to turn more of our participants into members to significantly build this list. We are also engaged in training camps and workshops, etc. With a bigger membership list we’d have a database to use to promote these activities. The main thing for us will be developing events.

9 We have 3-4 sponsors now, not big amounts but it all helps. The new people we are bringing in will need to focus on this aspect and WSA’s help would be good too. We get a trickle of money from legacies and some in-kind sponsorship from people who have become involved in the sport because their children play. One thing about getting sponsorship for us is that it’s more likely that we’ll get £1k from 10 sponsors rather than £10k from one – and there’s a hell of a lot more work in dealing with 10!

10 Across the NBGs in Wales there are too many small players and they wont be able to mount any kind of serious sponsorship or other business development activity because they don’t have the critical mass. We should be looking at putting groups of NGBs together to overcome this problem.

11 I would start by looking at the assets the NGBs have. One undervalued (in commercial terms) asset is the athletes themselves. I’d also look at the best practice models adopted by Arts & Business.

13 We’ve looked at merchandising, using our human resources - looking at strength and conditioning training, etc. Events are a major opportunity and we are already involved in that.

14 As I’ve said, we are already running heath based activities based on our sport and we could do with some support to explore other ideas in this area. Also, help to engage with some of the bigger companies in Wales to explore sponsorship ideas.

15 We’ve recently become aware of Tourism and Rural grants from WG, we didn’t know anything abut these. Also, we’re looking at where we might be able to bid for Big Lottery funding.

16 I think we need to pull together what is currently being done in Wales. We can learn a lot from each other and share best practice ideas.

21 We could look at schemes to work with companies on training/coaching as part of their staff benefits/welfare activities. The problem is we’d need to buy in coaching staff and I don’t know if we’d be able to make much of a surplus after paying them. It might be a very poor return on effort for us.

22 Multiple funding streams for NGBs are now key. I see sports packages for corporate clients as a early opportunity – you could use sport for team building, even have a corporate games vent where teams from large organisations compete with one another (like the World Corporate Games)

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23 I think there a many ideas that should be looked at. Start by looking at your sport – who plays it? Then say OK, who doesn’t play it and how can we attract them to the sport. That’s why there are so many different levels of sport now – elite men, elite women, different age groups, (including the elderly), disabled, BME, etc. That’s a way to create new customers and to meet a range of objectives for the public and private sectors. I like the idea of Summer camps – day camps for under 11s, residential for older children, etc. These camps could be based on a range of sports (collaboration) and even add in adventure activities (climbing, etc) and offer youngsters a chance to try a range of sports. You could build this into a competitive offering where attendees to different events can compete against one-another. I also think we don’t really value our assets – human assets such as expertise, coaching, medical, etc.

25 For me, the route to more business development comes from recruiting more ‘real’ business people onto NG Boards; the power of contacts cannot be overestimated. Also, WSA could look at a Client Relationship Management (CRM) system. Let’s face it, there aren’t that many organisation in Wales who have any real scale, maybe 250-300, so this is not a big audience to target. It’s just about engaging with the decision makers at a personal level; and sprit is a great basis for this.

What would you see as the most likely form of Events creation/management?

1 WSA would have to ask themselves, ‘what value do we offer?’ Let’s face it there’s a lot of very experienced events companies out there who we’d have to compete with. Having said that, I’m aware that a private company ran an event at Margam Park, called ‘Invincible’ and charged entrants something like £75 each and had a revenue for the day of £75k. So if you can find the right niche you can make some money.

2 It’s what I said about business development.

3 We do our own events management (we don’t use an outside firm) and this includes conferences, coaching and personal development sessions, etc so we’ve developed a fair bit of experience about how to run successful events.

4 This can cover a very wide range of activities, from business breakfasts and conferences to sports specific ‘festivals’, e.g. making a specific sports annual competition an ‘event’. To do this you have to look at it in terms of how spectators would see it, the media and sponsors, etc. The problem is that you are likely to meet resistance from the Development and Performance parts of the NGBs who will see commercial considerations cutting across their objectives.

5 I know people have been talking about collaboration to give an event more critical mass. I’m thinking of CAST – Cycling, Athletics, Swimming & Triathlon. This may be worth exploring and other sports may be able to collaborate too.

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6 It depends on what you mean by events management? For big events you’d need the services of a proper events management company – one with the resources and experience to handle the project management and delivery of such an event. It’s not something you could ‘turn your hand to.’ Also, if WSA move into this area (events management) they may end up having to bid for work against full time events management agencies because some of the funding will come from public sources which will demand open tendering as part of the procurement process.

7 We have already agreed as a team that we will create more events and this too will be part of the Head of Commercial’s remit. We use UK Sport to help us to develop and run events at present.

8 For us this is going to be the main commercial opportunity. There are major revenue raising opportunities in mass participation events (based on the city marathon model). Also, creating a range of events to cover as wide a group of participants as possible. We liaise with our British counterpart to target international events and have bid, with support from WG, and we have learnt a lot and hope to get a major event in Wales soon. I mentioned competition from other areas of the UK, etc but it is important to stress the threat that comes from the private sector operators. I see a key issue as finding niche events we can run that don’t compete directly with these major private sector run events. I am also interested in multi sport events – there’s a Glasgow Multi Sport event (Multi sport European Championships 2018)

11 Events cover anything from an annual championship, with only local appeal to hosting major national and international events. These are very different animals and we would need to treat them differently. Run4Wales is a good example of what can be done.

12 There is a range of opportunities for us to bid for national and international events. But the competition is strong and we have to manage our bidding resources very carefully. Also, we can look at smaller, more localised event creation, including multi sport events, etc. One good example is what is being done by the Urdd - Gemau Cymru.

13 We already run training courses. As we see it, it’s better for us to get some revenue in than for the private sector to get it. And we make a small surplus, which goes back into the sport. It’s worth saying that running the courses helps with meeting other objectives (other than raising funds) – we can inspire people to embrace the sport and become members with a chance of life long involvement in the sport. Events really should be for everyone, our membership is our key audience for developing events that meet their needs, can generate funds from participants and perhaps develop into something that is attractive to sponsors and spectators. Not all ideas are worth taking forward and we need to prioritise such ideas in terms of return on effort and risk.

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14 As I said, our sport is expenditure heavy, but again if we had support in assessing ideas, etc we may be able to develop some new events.

16 We’ve got a lot of good events in Wales like Cardiff Half Marathon. A good case in point is the recent netball international between Wales and New Zealand. The CEO took the decision to move the event to a bigger venue to increase the numbers of spectators and this was a great success. However, it was a gamble and we need to have processes in place to support CEOs in assessing risk so we don’t expose ourselves to potentially damaging financial repercussions.

18 We already run a series of events that attract participants and a small number of spectators. If we could have a more united event (of all the codes) we’d have a much more commercially viable event. But there’s a lot to do to get to that point.

19 My experience tells me that we have to be very selective when looking at events to support. You can think big, but understand the risks are greater; you can think small and sometimes it may not be worth the effort. But having said that, we should be confident that Wales is a good place to host international events. One issue I’ve noticed lately is that the public sector financial pressure includes the local Authorities and for a lot of sports, they are the people who own and maintain the main facilities. I’m already seeing cut backs that are having an impact on a number of sports that rely on these facilities. It’s a very worrying situation.

20 Events are for us the main way we can both promote the sport and drive engagement at a grass roots level, but also in terms of commercialisation - across a range of areas – sponsorship, entrance fees, merchandising, franchising (catering rights, etc), even TV rights.

21 I think we’re doing all we can as far as events go.

23 We don’t ‘think out of the box’ enough. Look at Boardmasters festival In Cornwall. This mixes sport (surfing) with music and lifestyle. We need to look at these they sorts of Festivals. Jamie Oliver’s got a foodie one. We need to look at what the Arts are doing in terms of creating these sorts of events.

24 We have a series of domestic events across Wales. Whilst they have a small spectator appeal, they really only break even in financial terms. There may be some opportunity for collaborating with other sports to create more critical mass and therefore more appeal to spectators and sponsors.

25 There are a lot of great ideas out there – just look at CEO Kickabout – sponsored by Acorn Recruitment and FAW Trust. This raises funds for the Trust and helps the sponsor build business relationships – a win-win situation. That’s what WSA and the NGBs have to keep in mind – is it a win-win? If so, there’s a possibility of success.

28 Again, focus on the customer and try to develop your initiatives in partnership with them.

Are there any other comments you would like to make?

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1 I think SW needs to change its emphasis – more towards fitness and well-being an less about sport, like the ‘Tough Mudder’ idea. This might mean changing the SW brand to reflect this different focus. In addition to this, SW should have a closer link to the Health Service in Wales – GP’s should be able to prescribe a course of exercise rather than a course of drugs.

2 We’re a small NGB although we are a direct member of the world governing body and we have relied on our own efforts to support the sport. We would value some help if there were any available.

3 From our point of view, we’d like to see WSA provide more shared services, like FSB do, where we can get economies of scale on the services all NGBs have to buy in like accountancy, etc.

4 I think from the NGBs’ point of view there’s a lack of clarity regarding what SW and WSA do, and who does what. It would be good to ask the NGBs what they need from SW and WSA.

5 Two points really, I think it is important that we look at what is being done across the NGBs to identify best practice in commercialisation and WSA could use this as a basis for developing a shared services in commercialisation. Finally, I would imagine that out of all the NGBs in Wales there’s probably only 27 of them that could realistically consider this type of venture (i.e. commercialisation). It’s fair to say that they will be quite different in many ways and it will not be possible to shoe horn them all into one model of commercialisation.

7 There are a lot of opportunities in our sport but we just don’t have the resources in house to take advantage of these opportunities. And the private sector sees that there is money to be made and they are much better than us at the commercial side. Of course, that means that the surpluses they make are taken out of Wales (and Welsh sport).

10 We have to be professional in approaching commercialisation. We are now moving into the world of professional organisations – sponsors, sports promotion businesses, etc. We have to up our game!

10 I would encourage WSA to rethink shared services – there are economies to be made there for NGBs. Also, we should be better at data capture – our membership (across all NGBs in Wales) is a very valuable asset, but some hold their own lists whilst others let the GB body hold them.

12 There are a lot of opportunities to develop events with our NGBs but we have to go into this with a clear, business head. We have to treat each idea for an event to a rigorous evaluation – we need proof that the event will deliver to our partners, participants and spectators and produce a surplus for the sport.

13 WSA will have to focus on the needs and circumstances of each individual NGB. Some have already developed some good commercialisation activities, some are

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trying to set up such activities now, some work with their British counterparts to look at alternative funding. WSA’s support will therefore have to be carefully targeted and tailored to the particular needs of each NGB.

15 I think the concept (i.e. Business Development & Events creation/management in WSA) is good, but I would look very closely at what’s in it for us. We actually have an Events Strategy, but I don’t have the people to implement it. Our club members want to race so there’s a real opportunity to meet their needs and generate some surplus that can go back into the sport. Also, when we’ve tried to be more adventurous (e.g. working in schools), we got a slap on the wrist from Sport Wales as they didn’t see that as our core activity. There is a bit of a mixed message situation going on.

17 It’s important to develop a two way communication between the clubs and us (NGBs). After all, they are the closest to our members who are our customers. When you see how commercial some of the clubs have been, you realise that there are some very good ideas out there and they have been put into practice and are generating funds and for the most part, all through volunteers.

18 I don’t know about other sports but there’s a real fear of change within ours. People say, ‘it’s been all right up to now, why do we need to change?’ This is a real barrier to progress and will take some time to change. I worry that we won’t have the time and the sport will become decimated simply because we have not acted soon enough.

22 Buying economies should make a quick contribution to the NGBs. Also, I think there needs to be an asset audit of all NGBs to produce a register of the assets they have. I’m sure there are some that don’t even realise they have something that has value to other people. Some NGBs are run like a sports club, there’s not enough managerial experience there and they have no real plan to take their NGB on into the next decade.

23 There are real opportunities to use White Label (a product or service produced by one company -the producer - that other companies - the marketers - re-brand to make it appear as if they had made it) techniques in sports commercialisation. We just need to spend some time looking at what we’ve got and what is attractive to the market.

24 In previous roles, I’ve been involved in trying to promote shared services. You get managers saying, it’s a good idea, but they still don’t sign up – it’s human nature to just want to focus exclusively on their needs. Add to this, that many NGBs are using volunteers to help with commercialisation – especially Board members. These people often put in huge amounts of time. It would be hard for WSA to compete with this free resource. On a more positive note, one aspect of getting sponsors is bid writing – it doesn’t matter which sport you’re talking about the skills are the same and the more experience a bid writer gets, the more successful they get. This is a real

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opportunity for a shared service hosted by WSA and of benefit to all sports in Wales who can use it.

24 It just seems to me that too much effort is expended on one off projects – take the Wales bid for the Commonwealth. This was done with SW’s involvement but it didn’t include long terms deals for sport in Wales, just the specific event. For me, the key is developing long-term relationships with key individuals in target organisations. Who’s going to do that for all of Welsh sport? Only WSA. Every commercial organisation is trying to make a ‘noise’, be seen, be heard. NGBs need to understand this – just having a kit sponsor for the all squads can be a really good PR event and there’s a lot of companies out here who would value that publicity and could afford to pay realistic sponsorship fees (cash or in kind or a combination).

28 You have to expect that developing relationships with business takes a long time. Look at A&B; they’ve been at it for 20 odd years. It’s important to know this when you’re planning so that you don’t run out of money before you’ve been able to strike some deals.

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