Owning or sponsoring a football team has become a popular alternative to advertising for many enterprises in Vietnam.
Vietnamese football became professional almost a decade ago and now presents a lucrative opportunity for companies to become involved. Some have fully-owned clubs, like Doan Nguyen Duc’s Hoang Anh Gia Lai (HAGL), Vo Quoc Thang’s DT-LA, and Do Quang Hien’s Hanoi T&T. Others, meanwhile, prefer to act as club sponsor to associate their brand name with a club, such as PJICO-SLNA and South Vietnam Steel-Saigon Port. Whatever the method chosen, most are considered to have been successful in terms of branding and product promotion.
One company director said that involvement in football brings four benefits to his company: (1) it makes their brand become widely known, (2) it leaves a good impression of the brand on millions of spectators and TV viewers, (3) it makes their business performance more efficient, and (4) it serves as proof for their strength in business.
Mr Duc, Chairman of the HAGL Group and dubbed “Vietnam’s Roman Abramovic”, after the owner of English Premier League champions Chelsea, was the first in Vietnam to apply the model of an enterprise owning football club, with HAGL. The contract he signed in 2002 with Thai striker Kiatisak, one of Southeast Asia’s most famous players, for a monthly salary of $15,000, the highest ever for a footballer at time, made headlines both here and abroad. Similar coverage came with his cooperative deal in 2007 with Arsenal, one of England’s most famous clubs, to found the HAGL - Arsenal JMG Football Academy, and the signing of Vietnamese-American player Lee Nguyen in 2009. Without spending anything on advertising, HAGL found success in brand promotion and became widely known in Vietnam and throughout Southeast Asia.
Mr Dao Quang Thep, former General Director of Hanoi TV, said that one minute of TV advertising costs around VND30 million ($1,580). Given that there are 22 rounds a season and that HAGL are televised each weekend, meaning its brand is being advertised for the 90 minutes of a game, at normal advertising cost this comes to some VND59.4 billion ($3.14 million). It’s clear, then, that owning or sponsoring a club is a relatively cheap but effective means of promoting a brand. This is proved by HAGL’s business performance since it became involved in football in 2001. Turnover almost doubles every year, and its legal capital increased to VND2,930 billion ($154.2 million, at a forex rate of VND19,000 = $1) in 2010, from VND250 billion in 2001 ($16.6 million, at a forex rate of VND15,000 = $1).
According to Mr Duc, when club plays well and has well-known brands, this attracts many other sponsors. An example is Clipsal - a world class electrical equipment manufacturer - becoming team shirt sponsor in 2004 for $100,000.
Chasing the game
Following on from the success of HAGL, many other enterprises then decided to promote their brands via football.
Few people would have been familiar with the Hoa Sen brand until the Hoa Sen Group sponsored Vietnam’s national team in 2007 for $100,000, and in May this year it inked a three-year sponsorship deal for $300,000 with the Myanmar Football Federation for the 2010-12 period. The deals undoubtedly help to promote the Hoa Sen brand both locally and in foreign market and allow the Group to expand its production of corrugated iron, steel and construction materials. Mr Le Phuoc Vu, Chairman and General Director of the Group, claimed that thanks to football the Group’s turnover has increased by hundreds of billions of dong annually.
Similarly, as the main sponsor of the V-League, Vietnam’s football championship, for VND10 billion ($650,000), the Tan Hiep Phat Company saw major success in terms of promoting its new product - Number One tonic drink - because with live coverage of 132 matches over 22 rounds throughout the season, the Number One brand reaches a total audience of around 500 million.
Vinamilk, meanwhile, came to a $2 million agreement with Arsenal, under which it was allowed to use the English giant’s logo and brand as well as photos of its players to advertise its Moment coffee brand on the media or at events. Vinamilk hoped that in a country where the people were crazy about football, its deal with Arsenal would see Vietnamese people know about its Moment brand.
The “Corporatisation” of football clubs in Vietnam has picked up speed since 2007, with a number of northern clubs and major companies coming together, such as Do Quang Hien’s Hanoi T&T, Le Van Thanh’s Hai Phong Cement, and Hoang Manh Tuong’s The Vissai Ninh Binh, in which Hanoi T&T has become very popular because of its generous owner and high-paid players. After becoming champions in 2010, the Hanoi T&T brand is set to become even more famous.
“In Vietnam today, involvement in football has become a lucrative endeavour for companies, but each team needs a good owner that can help the team make money in different ways,” said Mr Duc. “Revenue can be generated not only from ticket sales, shirts and advertising, but also from business activities and player transfers.”