SURFING RIDES THE OLYMPIC CYCLE

 

As the dream of Olympic surfing – led chiefly by charismatic ISA chief Fernando Aguerre – comes to realisation, it’s timely to ask; is Olympic status the injection the surf industry needs to reinvent itself? Or is it the Olympics that’s in need of surfing? One thing’s for sure: if Tokyo 2020 does include surfing, everything’s up for grabs.

Here’s our guide to everything you need to know about surfing’s Olympic inclusion. Short version? Get your skates on…

Broadcast

Broadcast rights are the IOC’s treasure chest, and the value of those rights has steadily increased for decades. The vast bulk (more than half) of that revenue has always come from the US and Canada. Europe and Asia are gradually increasing their stakes (and can be expected to do so more sharply in Tokyo in 2020). But surprisingly, although Olympic viewing audiences steadily increased over recent Games, that increase is far from exponential. Beijing 2008’s audience was around 3.55 billion, whilst London 2012’s was 3.64 billion. Whilst those are staggering numbers in an objective sense, the difference across the two Olympiads doesn’t represent the discovery of new markets, but more like natural growth of an existing market. The average age of those viewers is 55 and getting older. The IOC’s 2020 agenda roadmap discussed the Olympics’ struggle to stay relevant to younger generations. What’s more, licensing revenue since Beijing has fallen sharply, from US$163 million to $119million.

That’s where the new blood comes in. Skateboarding, rugby sevens and surfing open new vistas for a venerable sports broadcast like the Olympics. The widely held belief, dispelled only in the early weeks of June by the Tokyo committee, that surfing would be conducted in a wave pool, added fuel to the fire. When the WSL bought Slater’s pool technology, pundits eagerly joined the dots: surfing’s in, and it’s in a pool.

Since 2008, the host broadcast of the summer Olympics has maintained a steady 5000 hours of coverage. That’s 208 days of non-stop television in…16 days. For any sport to compete in that morass of grunting, heaving and sweating humans, it’s got to have visual appeal. Which is why so many people got on the wave pool bandwagon so fast: surely it guaranteed a level of performance and an absence of flat spots, blow-outs and flood tides. The conversation may last for years, according to Surfing Australia’s Andrew Stark. “We don’t want first impressions for Olympic spectators to be of a pool,” he said. “The ISA and WSL have come together well lately, and this will all evolve. The WSL, the IOC and the ISA will need to get together and work it out. It’s early days – we’re talking four to twelve- year cycles, and it’ll be heavily dependent on how the Olympics themselves work out in the future.”

Follow the Money

To understand the value of the Olympic dream for a sport like surfing, it’s necessary to understand a little about sports funding.

Sports money comes downstream in Australia from the federal ministry, via the Australian Sports Commission. Needless to say, the ASC doesn’t just tip out a bucket of cash. There are formulas, standards, accountability. Every sport that receives ASC funding is assessed annually as part of the Annual Sports Performance Review (ASPR), which examines the sport’s governance and financial status, as well as its elite performance levels and grassroots participation. Essentially it boils down to one question: is this sport a wise use of public funds?

After the 2014/15 ASPR, the ASC invested nearly $120 million in a wide range of Australian sports. Of that amount, according to its website, “a total of $20 million (has been) redirected in the past two years to sports with the greatest medal potential in Rio and beyond.”

From that pool of funds, surfing received $925K for high performance programs and $586K for grassroots involvement (the ASC calls it “participation”). To put that another way, 61% of the ASC’s funding goes to the elite. The elite/grassroots balance varies between sports, particularly across the Olympic/non-Olympic divide. Consider sailing: in the same (2014/15) funding round, it received $7.55 million for high performance (a boost of $125 million on the previous year, based on its “potential to deliver multiple gold medals at the 2016 and 2020 Olympic Games”), and $546K for grassroots. Surf lifesaving was slashed from $605K to $200K at elite level (its participation funding of $405K was unchanged). Cricket’s elite funding was halved, but its grassroots finding remains the nation’s highest at $1.116 million. You can see the pattern: Olympic sports receive far more funding than non-Olympic ones, and Olympic sports with perceived medal potential do best of all.

That bias towards high performance, in surfing and elsewhere, is said to be founded in credible research. “The evidence is that it works,” said Stark. “You create champions and icons, and that’s how you grow sports. Look at Layne Beachley, or Blue Crush: surf school participation for girls increased by 60% the year after that film’s release.”

Stark makes the point that the relatively low historical levels of government funding to surfing in Australia – currently around 23% of its overall revenue – have forced the sport to develop commercial smarts. In traditional Olympic sports like swimming or cycling, that proportion is more like 60-80%. Surfing’s grown up tougher, in other words.

 Andrew Stark makes the point that the relatively low historical levels of government funding to surfing in Australia – currently around 23% of its overall revenue – have forced the sport to develop commercial smarts.

The Bodies Behind the Bodies

Three entities – the WSL, the ISA and the IOC – crop up interchangeably in any discussion of Olympic surfing (you need to get comfortable with acronyms here). And in Australia, we can add our own peak body to the mix – Surfing Australia (SA). Are these organisations united in their push towards Olympics? Andrew Stark attempted to unravel it: “The push has absolutely been led by the ISA,” he told ASB. “Fernando (Aguerre, the ISA president) has been on a mission to achieve it. Where Surfing Australia fits in is that we’re by far the biggest national governing body in the ISA, with more full-time staff than the ISA itself. We’re incredibly supportive: SA are pushing hard with the AOC, and we’re in constant contact with the ISA about the bid. Layne Beachley, our chair, was until recently the deputy chair of the ISA. We’re very close to the whole thing.”

Aguerre, for his part, is happy to share the credit: “It’s important to say that the work and effort that I, and the ISA, have invested over the past decade has been for the good of all surfing worldwide and everyone stands to benefit as a result…we’re in regular dialogue with the WSL: Olympic participation will add significant value to their efforts.”

The investment by the ISA has been huge: “well over seven figures in the past decade.” According to Aguerre, raising the necessary resources hasn’t been easy. “It’s been a blood, sweat and tears effort…I personally have never approached this effort as ‘what do we get out of it’ or how do we recover our investment. It’s not that kind of campaign. We’re doing this because we believe it’s right, and even if we’re not successful for Tokyo, we would continue to push for 2024 and beyond.”

Those Who’ve Gone Before

The lesson of sports which have crossed over from mass youth appeal into the Olympics is that sceptics and traditionalists will resist, but ultimately everyone benefits. The Winter Olympics needed snowboarding to remain relevant to a youth audience, and likewise the Summer Olympics need surfing (Greco-Roman wrestling now having descended into a comedy staple). Conversely, the X-games didn’t need the Olympics. It took one pivotal moment – Shaun White’s iconic Double McTwist 1260 (the name itself hints at the commercial potential) at Toronto in 2010, to catapult an individual and his sport into the mainstream.

Sally Fitzgibbons also points to BMX’s inclusion in Beijing in 2008, as an example of a successful transition. “It’s a really explosive form of cycling – rough and exciting, thrills and spills. They have a world series like us, and it’s great to see their young athletes saying ‘I want to make the Olympic team.’ If surfing could transition the same way, that’d be great.”   

Branding

Fernando Aguerre sees mutual benefit in Olympic surfing: “Surfing has a unique and modern blend of performance, lifestyle and culture that would add huge value to the Summer Games. It provides the IOC and Tokyo 2020 with an opportunity to connect with new audiences and youth populations around the world through spectacular live action, stunning broadcast opportunities and incredible levels of connectivity via digital and social media platforms.”

So how does the IOC sell that dream? It manages a sponsorship program called The Olympic Partner (TOP) that directs the licensing revenue from participating brands to cover the Olympics’ organisational costs. Sponsorship is responsible for 45% of the overall revenue generated within the four-year Olympic cycle.

For a sports brand, it’s about the most prestigious endorsement on earth – and it doesn’t come cheap. At the 1984 Los Angeles Games, the IOC reduced the number of advertisers from hundreds of brands down to 35, trading far greater exclusivity for stratospheric expense. In 2012, the top tier of eleven sponsors including BMW, Coke, Panasonic and VISA paid more than $100 million each for the use of Olympic IP during the four year cycle. In 2014, the IOC doubled the fee to $200 million, and in the same year Philadelphia-based communications giant Comcast paid $4.4 billion for the broadcast rights across 2014-2020.

With this sort of money propping up the edifice, it’s no wonder the IOC are strict on branding. Each hosting nation’s organising committee is responsible for having laws in place to prevent ambush marketing (such as using the Olympic rings on a wetsuit sleeve). For example, the IOC’s ‘Rule 40’ says that during the specified four-week blackout period athletes cannot promote brands that are not official partners of the games. These rules have been criticised as a restriction on the ability to do business freely. In London, fines and imprisonment were threatened against businesses including a lingerie shop, a grandmother knitting for charity and a café selling ‘Olympic torch’ baguettes.

The relevance for surf brands is that few or none will be in the budgetary league to be official sponsors. So they’re left managing the rules around product branding and campaigns, and simultaneously trying to gain maximum benefit from their athletes’ involvement. To be clear, it’s not unlawful for a non-sponsoring brand to generate commercial leverage off the presence of its athletes in an Olympic team. But it takes considerable skill – and a lot of forward planning – to get it right. As an example, H&M are launching a new sports collection, “For Every Victory”, featuring core sports and training pieces that have all been tested by the Swedish Olympic team, and fronted by personalities including Caitlyn Jenner.

Andrew Stark said at the SIBA awards this year that brands are “underestimating the power of the Olympics and their positive impact on a global aspirational audience.” Asked about those comments recently by ASB, he explained: “Oakley know it – they’re a multi-sport brand with exposure to the Olympics already. Hurley are owned by Nike so same there; and there are surf brands that have an understanding through their Winter Olympics athletes. They understand the Olympics and how to capitalise. But the four year lead-up to Tokyo is probably not a lot of time for other brands to get up to pace.”

Billabong’s Scott Hargreaves spoke to ASB about their plans: “Once we know for sure on the decision, we’ll begin the process of building the plan and mapping out our position as a brand with athletes competing at the games.” Hargreaves is keenly aware of the challenges and the opportunities: “The inability to leverage the athletes competing at the games will be a challenge for sure. We’ve experienced this challenge with various snowboarders competing in the winter Olympics.  We’ll need to see the exact rules the IOC put out, but we’ll be targeting our athlete messages before and after the games. If it’s possible to tell other brand campaign stories that align to the athletes, we’ll turn the volume up on those through our digital and instore channels too.”

For brands like Billabong, it’s not yet clear how the ‘Olympic effect’ will filter own to the shop floor. “The retailers who carry the brands’ Olympic theme product for this year’s Rio games would have a deeper understanding on what success and limitations look like,” said Hargreaves. “As a brand we’ll bed down our plan before we engage with our retailers on the opportunity.”

Oakley’s first involvement with the Olympics was at the 1988 games in Seoul where athletes wore the revolutionary Oakley Eyeshade in competition. At the 1996 Atlanta games, they activated on-ground with the launch of the first Oakley Safe House, a place for their athletes to relax with family, away from the media and craziness of the athlete village and a hub for them to come and pick up their product for competition. The Oakley Safe House has since become a permanent fixture. In London in 2012, Oakley athletes took home 110 medals, 38 of which were gold. In 2016, for the first time, Oakley eyewear worn by athletes will be available to consumers through their retail stores and wholesale accounts.

Oakley Sales Director for Sport, Luxottica Greater South Pacific Damian Campbell told ASB “The biggest challenge would have to be removing all trade marketing collateral featuring Olympic athletes from the shop floor during this time. However, our reps have been through this process before and know how to handle it.” This is not done blind: Oakley have a strong enough relationship with the AOC to “just pick up the phone and ask for guidance” on ambiguous topics. “We have a specific Olympic team locally and globally that work closely with both the IOC and AOC to ensure we are adhering to the rules.” 

And they’re keenly aware of the payoff: “Undeniably the mass brand awareness generated from the games is huge. We see a spike in sales across the portfolio as a result of being a part of the games.”

At the SIMA conference in Los Angeles in June, a detailed session was devoted to getting brands up to speed for the proposed LA 2024 Olympics. That’s eight years away and the bid isn’t even locked in yet, but it goes to show how long the cycle of Olympic readiness can be.

At the SIMA conference in Los Angeles in June, a Wasserman Media Group session was devoted to getting brands up to speed for the proposed LA 2024 Olympics. That’s eight years away and the bid isn’t even locked in yet, but it goes to show how long the cycle of Olympic readiness can be.

Pete Townend was in the room, and he told ASB: “Casey Wasserman’s take on the Olympics is that the exposure it will bring to surfing as a sport will have a huge impact…the Olympics are the most-watched sporting event in the world. “The surfers who win those first gold medals will become the most famous surfers in the world – a surfer might finally get on the Weeties box like Shaun White.”

Australian brands have done a lot for surfing over decades, and in many ways have brought the sport to where it is now. Non-endemics have only just arrived. The Olympics are likely to give surfing’s long-term supporters a much-needed boost after some hard years: “something back for investing so heavily in their sport,” as Stark puts it.

Athletes

During the bid process, the ISA say they’ve had verbal endorsements from surfers like Gabriel Medina, Johanne Defay, Ace Buchan, Felipe Toledo, Lakey Peterson, Kolohe Andino and even Kelly.

At 25 and currently ranked world number five, Sally Fitzgibbons would be among the favourites to represent Australia in Tokyo. She represented Australia as a runner in the Youth Olympics, picking up two gold medals. Her sponsors are giant internationals like Red Bull and Landrover, but her attitude to the commercial implications of Olympic selection is surprisingly personal. “Yes, there’s rules around brands,” she told ASB. “But if the opportunity came around, I wouldn’t let my personal interests hinder it. Besides, you’re boosted by having a national following. It’s beyond financial opportunity or brand opportunity – it’s really about the big stage and the patriotism.”

At 28 years old, Steph Gilmore is two places behind Sal on the tour rankings, but with a massive six world titles already behind her. She told ASB “I imagine most companies would see it as a huge thing, but Olympic athletes can’t wear personal branding. At London in 2012, some swimmers wore Beats By Dr Dre headphones, and there was trouble over it. (Samsung was the official partner – Beats By Dr Dre is owned by Samsung’s rival, HTC).

“Maybe we’d all have to strip our boards, wear national uniforms. But the marketing for the actual athletes (as opposed to the companies) would be great. Take Usain Bolt – I love him – and look at that for a profile. I learned of him through the Olympics, but now I follow him outside of the Olympics. I know his brands. So I think it can still work for us individually as surfers.”

 “Take Usain Bolt…I learned of him through the Olympics, but now I follow him outside of the Olympics. I know his brands. So I think it can still work for us individually as surfers.”  – Steph Gilmore

Supergrom Kyuss King, at 17, can look forward to being at his competitive peak when Tokyo comes around. But he and his dad Justin are commercial realists: “I do a lot with my sponsors so I’m closely associated with them,” said Kyuss. “It’d be a challenge (competing without branding). But it’s a large audience – you’d depend on your sponsors having a plan.” As Justin sees it, “You can get good media off the back of it. That’s a bridge that Kyuss will have to cross. But never at a cost to his sponsors.”

The Future

“We’re already seeing extraordinary growth in Asia, Africa and Latin America,” Fernando Aguerre points out. “The Olympic Games will provide an incredible platform to showcase surfing and its core values.”

And for the time being at least, “core values” means the beach: our widespread assumption about wave pools can wait. The WSL/KSWP deal might amount to no more than a specialty QS or WT event. The Japanese organising committee have made their positon clear – surfing will be held in the ocean at Chiba. The two best bids for the following (2024) Olympics are Paris and LA – both with iconic beaches nearby. If surfing can do this right at Tokyo, there’s a gilded run from there, and no immediate pressure to run it in a pool. Mind you, a successful bid by one of the Emirates, or mainland China, could change all that.

Meanwhile, for the brands, the race is on: to design brand activations that harness the momentum of the Olympics without crossing the line. To sign athletes who can win medals and continue to personify the brand once the Olympic carnival has packed up its tents. And to scale their production to meet the demand. As Billabong’s Scott Hargreaves puts it, “we’ll definitely be internalising the opportunity and working on a plan to best maximise the moment.”

When Fernando Aguerre became ISA President, the ISA had 32 Member Federations. Now there are 99, including nations like Haiti, Sierra Leone and Bangladesh. At the recent ISA World Surfing Championships, teams such as Costa Rica, Peru and Italy were the standouts. Olympic status, as Aguerre points out, could open up massive new opportunities for those populations, and correspondingly for the industry. Are we ready?

 

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