Following the success of reaching 2015’s Grand Final, the future is once again looking bright for the NRL’s most successful club, Brisbane Broncos. Equally important to the club’s continued growth is the off-field success it has experienced over the last few years. The Broncos’ General Manager of Marketing and Commercial Operations, Terry Reader, spoke to The Australian Business Executive recently to discuss the club’s commercial strategy.
“The game and our club are successful because people are emotionally connected to it,” Mr Reader says. “But the greatest challenge we have is making the right decisions for the club and the company, and making sure that they’re not emotionally based.”
The club’s appearance at the Grand Final in 2015 came on the back of almost a decade without winning the Premiership, and Mr Reader understands the importance of everyone at the club working together to capitalise on being so close to a first victory since 2006.
“Premierships alone don’t guarantee profitability. We understand our members, sponsors, shareholders and supporters, and we know they expect a competitive team to support each year, and a team consistently performing in the top four provides that base.”
“I grew up here in Brisbane,” Mr Reader explains. “I was actually a Bronco fan growing up myself, and went through University here in Brisbane, and then when I graduated I went over to England for four years to travel and work.”
After a couple of sales roles in England, Mr Reader soon began working with a big sponsorship and PR consultancy in London called Consolidated Communications, where he worked for over two years, rising to the role of Senior Account Executive.
“In that role I had a wonderful opportunity to work on the Anheuser Busch account, which included the Budweiser and Michelob beer brands, and was exposed to some of the biggest sporting properties in the world.”
In his role with Anheuser Busch, Mr Reader worked on the sponsorship and PR elements for the Budweiser and Michelob brands across the UK during the 2002 FIFA World Cup, as well as working with the Michelob brand in their capacity as sponsor of golf’s Ryder Cup.
“I also worked with Manchester City, Manchester United and Chelsea, who we formed sponsorship arrangements with while I was working at the agency, so I was exposed to some wonderful experiences in the UK. I believe I wouldn’t be where I am today if I hadn’t gained that valuable experience.”
The biggest difference for Mr Reader while working overseas was the level of money gained from TV rights, which he admits eclipses that of Australian sports. Despite the financial benefits, however, these broadcast arrangements can also bring creative problems.
“I believe, in some overseas markets, thinking outside the square commercially is not as good as it is in Australia, because we’ve got such a congested market. For example, there’s 47 professional football teams in our four codes.”
In a country with a population of less than 24 million, this congestion means a heightened sensitivity to commercial opportunities is required to separate a sports team from the many others across the country.
Mr Reader returned to Australia in June 2003 to take up a sponsorship position with the Broncos, in a small commercial team of only 7 people. After nearly 5 years at the Broncos, he moved on to work with the Brisbane Lions AFL team, joining as Commercial Manager.
“I got offered the opportunity to go to the Lions and look after their whole commercial operations area, which was a big challenge. I learned a lot about how the AFL was run, how they dealt with the clubs and the commercial magnitude of the AFL at the time.”
On the back of his past performance and experience with the Lions, Mr Reader was invited back to the Broncos in 2009, with a new General Manager role created for him.
“It was nice to be missed,” he admits, “and flattering to have the business side restructured to provide me with the opportunity to lead the Broncos’ commercial and marketing areas.”
The position which Mr Reader now fills includes overseeing sponsorship, corporate sales, events, game day, membership, ticketing and merchandise to bring revenue into the club, as well as managing the brand through marketing, communications, advertising and digital.
“I’ve got a wonderful staff, that has certainly grown since re-joining the Broncos in June 2009. We’ve gone through a very big change process since 2009, with a complete restructure of the commercial and marketing areas of the club.”
This restructuring resulted in the development of a three-stage process that has helped the business build steadily, taking some areas that were previously outsourced back in-house and growing staffing levels from 9 to 24 since 2009.
“One of the biggest changes was in 2011, when our new CEO Paul White came in. He came from a HR background in his previous role, and the board and executive staff developed a new strategic plan, linked to Performance Management systems for the entire club.”
After failing to finish in the top four in the seasons before 2015, it felt as if the club had lost some of its aura. The club is nothing without its fan base, so keeping the sport and commercial sides of the business in sync is vital to its ongoing success.
The secret behind the Broncos’ continued commercial success, despite a period of 3 or 4 lean years on the field, lies in the board’s willingness to back management to innovate and invest in people in order to grow the business.
Over the first three years of the restructure, the club didn’t enjoy much on-field success, experiencing a lowest ever placing of 12th in 2013. Despite these setbacks, the Broncos’ commercial performance has remained solid, even increasing in the following years.
“The Performance Management system we put in,” Mr Reader says, “when we developed the strategy, allowed us to employ new staff, people who are skilled in their respective areas, taking on more defined roles with clear KPI’s.”
“We’re always trying to exceed our budgets, even when we set very challenging budgets. We are comfortable being uncomfortable, and always look at new ways to grow the business to achieve those challenging budgets.”
As the only sporting team in Australia publically-listed on the ASX, the club experiences rigid levels of governance and a necessity to make sure that the business remains strong, ensuring dividends are paid to shareholders.
“It’s a priority for any public-listed company to be always increasing revenue and growing profit, but when you also combine that with a football club environment, I think that has helped the club have very clear goals, to ensure we are producing a profit each year and always looking at new ways to stay ahead of change on and off the field.”
Avid Fan Base
The club is not only considered to be one of the most highly-valued in Australia, but has also been recognised as the most supported team in the country, with the most avid fans, as well as amassing a significant following across TV and social media.
“The Broncos brand extends way past the 80 minutes that you see on the football field,” Mr Reader says. “We’re quite proud of being leaders in most measures off the field. We’re not number one in every area. We benchmark ourselves against teams locally, but also from around the world, to make sure we are continually looking to innovate.”
Part of this process is offering fans and members a great club experience, especially on game days. The club’s strategy for building its fan base and reinvigorating the game day experience has so far proved extremely successful, listening to what the fans want and providing it.
“When you look at our social media footprint, that hasn’t happened by accident. We were certainly the first NRL club to employ a full time digital person. We did that at the end of 2009, which was still quite early to be doing things like that.”
“The digital area has advanced faster than any other, and our metrics have grown on the back of a clear strategy around the timings and content of posts and engagement.”
The club’s commercial strategy has certainly paid off, as crowd sizes dwarf those of other NRL teams, with an average home attendance last year of nearly 34,000 at Suncorp Stadium more than doubling the league average of 16,000.
“Membership is very important to us,” Mr Reader says. “We’ve got a strategic goal to have 35,095 ticketed members by 2017. That number sounds really weird, because it is, but that is the bottom two seating bowls of Suncorp Stadium.”
Mr Reader admits that everything the club does is focused towards the three key pillars of its strategic plan, with the hope of eventually filling a significant percentage of the 52,000 capacity stadium, giving its ticketed members the very best seats in the house.
“At the moment, around 50% of our crowd is casual, and our research tells us that those casual attendees only actually attend 2 games a year. So, working on ways to get those 2 to 3 [games a year], or graduating them to ticketed memberships, will make a big difference.”
This work is often done in conjunction with third parties, since the club doesn’t own the stadium, ticketing or many other areas, meaning changes can take some time to implement and involve a significant amount of third party input and coordination to bring to life.
“One of the biggest differences in terms of growing our membership base, certainly our ticketed membership base, has been our four-game membership. Three years ago, we were able to bring in a GA [general admission] area at Suncorp Stadium.”
The new seating area has made it possible for fans to purchase a four game flexi-membership, allowing them to choose which matches to attend on a game-by-game basis, rather than having to commit to certain games at the start of the season.
“We’ve seen growth in this membership product since making it more flexible, the result being a 25% increase in the first year, further growth in the high 20s year on year, and this year we are already seeing great growth again. It’s been a wonderful thing for the club and is making it easier to become a ticketed member.”
Despite the growth in popularity of flexible ticketing in the game, Mr Reader insists that it is still the full, twelve-game season ticket memberships that benefit the club most, continuing to grow despite the popularity of the four game flexi-membership.
However, Mr Reader is quick to add that non-ticketed memberships are equally important to the club and its commercial strategy.
“We like to see ourselves as a Queensland team,” he adds. “We do regional events around the state each year. Over the last four years we’ve done in excess of 17, in places like Mount Isa, Longreach, Gladstone and Rockhamptonwe’re actually off to Cairns this week.”
These events are opportunities for fans unable to get to Brisbane to engage with the club. Many events take the form of a dinner, with junior footy clinics often linked. Proceeds go back into the community as a donation to local junior rugby league clubs, made after each dinner.
“Some current players, ex-players and our CEO or Chairman generally will attend each dinner and interact with the guests, and each of the attendees at the event becomes a non-ticketed member of the Broncos, as part of the ticket price.”
The club certainly has an important part to play in the growth of the state, with the Broncos posting over $40m of revenue in 2015 alone, a significant contribution to the economic and cultural development of the local area.
“We see ourselves as a very big part of Queensland and certainly Brisbane culture,” Mr Reader explains. “Going to a Brisbane Broncos game we hope is something people want to do and are excited about doing.”
When the club was engaged in the process of renewing its stadium agreement a couple of years ago, fan research undertaken at the time indicated that 16% of the Broncos’ match day crowd tends to stay in Brisbane for one or more nights.
“The media would periodically generate stories on the back of our big crowds, quoting a number about what the Broncos are worth to Brisbane and our local economy, but often without a truly accurate figure. So we thought we’d commission a research agency to do it correctly.”
Mr Reader admits to being pleasantly surprised about the economic contribution the club makes by enticing people to games, with huge benefits seen through employment, food and beverage sales and hotel stays in the area.
“As I mentioned previously, 50% of our crowd is casual,” he says, “and we’ve even got members coming from places like Gympie, Dalby and Toowoomba to come down to watch a Brisbane Broncos game.”
The club enlisted the help of sports consultant Futures Sport and Entertainment to undertake the research, which found the club generating an impressive $135.3 million into the area each year, representing a significant contribution to the local economy.
“One of the biggest areas of revenue for our club is through our sponsorship family. We’ve got a strict sponsorship hierarchy, divided into categories depending on investment levels, which has helped drive that revenue increase and protect the rights of sponsors investing in the club.”
This carefully cultivated sponsorship system has seen the club generate significant revenue over the years, and the ability to foster longevity in many of its sponsor arrangements has driven this revenue generation even further.
“In our premier category of sponsors,” Mr Reader says, “we have an average tenure of over ten years, which is significant, and we have four three sponsors that have been with us since the club started in ‘88, which we’re very proud of.”
The secret to this longevity lies in the club’s tailor-made approach to deals, ensuring each arrangement is unique for the partner. Deals are designed to meet the individual objectives of the sponsor, ensuring they have an incentive to renew and increase the association in the future.
One such sponsor is NRMA Insurance, a sponsor with the club for over 13 years and principal partner for 6 years.
NRMA have launched several campaigns over the years, but one of the most successful was its Broncos carbonators campaign to reduce carbon levels, in which they hoped to gain 20k new customers, and with the help of the Broncos brand gained 40k.
“We’ve seen some wonderful growth,” Mr Reader says, “certainly over the last four years, year-on-year, which in a challenging market, and from all reports hasn’t been the same for many other clubs.”
“We have developed into a form of a media company where we sell daily, weekly, monthly and annual packages on our channels. We can provide meaningful measures for sponsors and advertisers and the explosion in the digital channels has seen the traditional nature of our sponsorship and partnerships change.”
In an era where TV deals are paramount to the success of sporting teams, the announcement of a new $1.8 billion NRL TV deal for 2018-22 is significant for all clubs, but will have a particular benefit for the Broncos.
In the previous broadcast agreement, a Broncos clause was inserted to ensure no team could play any more than three quarters of their games in any one slot (such as Friday night), except the Brisbane Broncos.
The new agreement will put the power back into the hands of the NRL, which will be able to tailor a fairer TV schedule.
In addition to national TV schedules, the club runs its own TV show on free-to-air with Channel 9, which is currently played in the UK, Asia and Africa, and will feature on Foxtel from this year. The show is a lifestyle programme, incorporating around 25% football content.
The club will have a TV studio installed as part of a new $25 million training, administration and community facility at Red Hill, which is scheduled to open in 2017. This new centre will represent a huge step forward for the club, taking them to another level.
“The thing I’m proudest of about what the Broncos have achieved over the last five years,” Mr Reader says, “is our sponsorship growth in a challenging market.”
“The fact that we have a strategic plan that everyone’s bought into with the Performance Management system, linked to KPIs that motivate and reward staff, has really complemented the hard work.”
Mr Reader stresses that everyone at the club plays a part in the business, from the players through to the commercial team, a factor which has contributed hugely to the commercial strides the club has made.
“Over the last five years, that commercial success for us hasn’t been an accident, it’s been about the people and vision. You’re only as good as the people that are actually in your business, with everyone working together to achieve goals.”
To read our full editorial profile, click on the cover image below. This Brisbane Broncos business profile has been made possible by the generous support of:
By Nicholas Paul Griffin