Chime takes Brazil plunge

Sport Business News

English PR and marketing business Chime has become the latest to enter the Brazilian sport market in a bid to take advantage of the 2014 FIFA World Cup and 2016 Rio Olympic Games.

The deal sees Chime acquiring 60% of the share capital of Golden Goal Sports Venues (Golden Goal'). Golden Goal was set up in 2005 in Brazil by its two founding directors and major shareholders – Cadu Ferreira and Mauro Correa. Following the transaction Cadu Ferreira and Mauro Carrea will each retain 20% of Golden Goal and will remain with the business. Golden Goal is involved in both sponsorship consulting and rights selling for major companies and sporting federations. Its major clients include AC Milan, Petrobras, Flamengo, Botafogo and Banco do Brasil. Sponsorship investment in Brazil is forecast to double over the next four years with the FIFA World Cup in 2014 and the Olympic Games in 2016. With a foothold in the Brazilian market Chime intends to export knowledge from around the Chime Sports Marketing Division to Rio de Janeiro in areas of event activation, consultancy and sales. The company is also looking forward to Golden Goal providing a base for the services of it recent acquisition of signage company Icon which played a pivotal role in the city branding programmes at the last FIFA World Cup in South Africa. Under the terms of the transaction the initial consideration for 60% of the share capital of Golden Goal is £2. 4m in cash which represents a multiple of 5. 3 times 2010 profits before interest and tax (EBIT). In addition, two further tranches of deferred consideration may become payable in March 2014 and March 2017, based on average EBIT. Total consideration is capped at Brazilian R25m (£9. 5m). The Brazilian sport sponsorship and sports marketing sector is generally considered to be underdeveloped; for example, prior to their ongoing refurbishments, most Brazilian stadia had few if any corporate hospitality facilities, let alone associated marketing programs. The FIFA World Cup and Olympics should present major opportunities to specialists and entrepreneurs in such areas. Chime aquired Icon, an experiential marketing business in April 2011. Icon is based in Sidcup in Kent and started its activities in 1949. Icon brings sponsors brands to life at stadia and major sporting events around the world, usually on the basis of multi–year contracts. Customers include major sporting federations such as UEFA where Icon has assisted in the physical branding of the UEFA Champions League (one of the most successful sporting events in the world) for the past seven years. Other customers for whom Icon has worked or is currently working include FIFA; the Ryder Cup; the Boat Race; Abu Dhabi Motor Sports; and LTA Wimbledon. Icon has a manufacturing facility in Sidcup, sources product from suppliers in the Far East and has a physical presence in key countries in the Middle East such as Qatar and Dubai. In addition to branding experiences at sporting events Icon provides experiential marketing for non–sporting commercial brands and recent activities have included work for Aviva and for Adidas at the departure of Team GB for the Winter Olympics in 2010 which was marked by images projected across Somerset House. Icon creates many different brand experiences including the use of images across water features. Following the acquisition of Essentially Group in 2009 Chime has been a significant participant in the sale of advertising for major sporting events such as Cricket test matches and Rugby internationals. This business has shown very substantial growth since the acquisition. The acquisition of Icon significantly increases Chimes sports marketing business in the football arena. In addition Chime currently purchases advertising space on behalf of clients and will be able, where appropriate, to offer a fully integrated product offering to advertisers working with other parts of Chimes Sports Marketing Group. Icons expertise in the projection of images will also be of potential value to all Chimes marketing clients. Chime sees significant growth opportunities for Icon resulting from the Olympic Games in London in 2012 and in Rio in 2016 and in utilising the contacts and relationships with major world sporting federations that Icon will bring to the Sports Marketing division. The experiential marketing activity is also a business which other Chime companies will market to their clients. Icons contracts for annual sporting events tend to be on a multi–year basis and whereas contracting parties to Icon historically tended to be local organisers there is an increasing trend for such contracting parties to be the international sporting federations. There is therefore significant benefit to the Icon business in becoming part of a larger international group.

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