Onside - How to win the elite corporate sports game

In the wake of the Global Financial Crisis, CEOs are being forced to justify every cost and every action. Nothing is sacred in this environment. Not even sports.

CEOs have long been members of sports clubs, while others (such as bankers or salespeople) have used sports to network with CEOs. But in a tight corporate environment, the link between sports and business is being closely examined. Is it an effective way for businesses to network with increasingly time-poor CEOs? Do CEOs themselves benefit from being members or directors of clubs, or is it an expensive and potentially reputation-threatening indulgence?

There is a growing recognition that sports events are no longer just a perk – CEOs and networkers need to adhere to rules to maximise the benefits of using sport for business purposes.

"Increasingly, if you are [a CEO] spending money on events you want to see, that aren't justifiable to your board or employees, that destroys reputations as an individual,” Richard Speed, ANZ professor of marketing strategy at the Melbourne Business School, said.

Business people are involved in all sports, but the AFL and NRL remain at the pinnacle in terms of prestige. The boards of AFL clubs particularly – including the likes of Collingwood, Carlton, Essendon – are packed with corporate heavies and carry extreme clout in Melbourne. Businessman David Smorgan is president of the Western Bulldogs. Then there are high-profile members and supporters.

In Rugby League, Souths and the Sydney Roosters dominate the Sydney corporate scene, while in Brisbane and the Gold Coast business heavies are closely linked with the Titans and Broncos – where Lachlan Murdoch is the no.1 ticket holder.

'People like sport'

"It provides great release for people in high pressure jobs working significant hours during the week,” said David Evans, managing partner of investment advisory firm Evans and Partners and the chairman of Essendon Football Club. "It's a great place to entertain clients and to get exposure to a whole different set of industries you wouldn't otherwise in your day to day life.”

But Speed, who has had PhD students work on the issue, says it is incredibly hard to prove whether corporate entertainment at sports events changes buying behaviour or sales strategy. He does note that in the UK there was a push to get all corporate boxes classed as corruption and the equivalent of accepting a bribe. "Lawyers seem to think it works,” he said.

"There's nothing sinister,” about entertaining CEOs at sports events, said the head of mergers and acquisitions at one of Australia's top investment banks. "People like sport don't they? Clients are your friends. We don't take people to sporting events on the hope that gives us a mandate. No one would give you the mandate on that basis.”

The banker admits, however, that taking CEOs to sports is about getting face time. "You get to know them better,” he said. "We're trusted advisors. You can't become trusted advisors unless you spend time with people. CEOs are very busy people; they're flat out. If there's something they would be otherwise going to do, and you can be there with them, it's a good opportunity to have a chat.”

But there are rules and etiquette for entertaining CEOs. "The last thing I would want is someone pitching to me at a football match,” said Mark Bouris, the high-profile founder of Wizard Home Loans and chair of Yellow Brick Road, who sits on the board of the Sydney Roosters NRL team.

"Most of these guys [CEOs] get hassled all the time,” Bouris said. "If at the end of the game they asked if they could send an email the next day, I'd be open to that. I'm more likely to look at an email and have a think about what it is they're putting to you. But it doesn't make a deal happen; the deal's got to stand on its own two feet.”

Bouris says inviting CEOs to games does open doors. "It's a bit more powerful than sending someone an email or cold calling someone, or trying to get somebody through somebody else,” he said. "But it's not a time to pitch an idea.”

Potential downsides

Speed says there is also a potential downside from entertaining CEOs. When you invite them to an event, you establish expectations. If you invite them to a major game, then next time to a lesser game – or worse to no game – you could damage the relationship.

But CEOs often don't need to be invited – they often become closely involved with clubs as members, board members, no.1 ticket holders, and even owners, as is the case with mining magnate Clive Palmer.

David Evans says football is a great release. "It breaks down a lot of barriers and enables people to mix on common ground,” he said. But there are other benefits. Evans said that in the last few years more politicians are turning up to matches, which allows corporates to rub shoulders with government.

Speed says rules also apply to how CEOs manage their membership of sports clubs, and what they're getting out of it. "If you walk in a room and you're the most important person there, you're doing everybody else a favour. You want to join a network that helps you. If it's not the right network for you as an individual or organisation, then don't do it.”

Bouris says he has a cynical view of CEOs joining sports clubs at the board level purely to network. "If a CEO joins a sports club because you think it's going to benefit yourself commercially, you're doing it for the wrong reason.” He says there is so much to do at the club level there isn't much time to do other things. "If they were trying to get a leg up a bit (by joining the board, we'd recognise it straight away,” Bouris said.

Bouris said he joined the board of the Roosters independent of his business interests. "It was more out of dedication to the club and its members and community. I love it ... I didn't get any business benefit out of it.” However sport has paid off in business terms. "I probably met James (Packer – a business partner for eight years) through football, but I was just a supporter. I wasn't on the board.”

But Speed says in the new corporate environment CEOs can't afford to use business as a way to indulge and fund their own passion. If there is an event where the most important face – the CEO – is required, they should show. "Otherwise, just get out of the way,” he said.