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Regional
Strategy and Policy Committee
05 December
2013
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Sponsorship
and Commercial Partnerships
File No.:
CP2013/27734
Purpose
1. In July 2013,
the Mayor requested that Auckland Tourism, Events and Economic Development
(ATEED) lead an exploration into the viability of leveraging revenue via
sponsorship or commercial partnerships. This paper updates the Regional
Strategy and Policy Committee on investigations into the viability of such a
programme across the Auckland Council group. This paper sets out some of the
opportunities and challenges in developing a more comprehensive approach to
sponsorship and commercial partnerships and makes recommendations for further
work and potential implementation.
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Recommendation/s
That the Regional Strategy and Policy Committee:
a) note the
work undertaken to date by ATEED to explore opportunities for a more coherent
and proactive approach to sponsorship and commercial partnership
opportunities;
b) agree that
the work programme set out in paragraph 21 of the report be progressed by
ATEED, working closely with Auckland Council and other CCOs; and
c) agree that a small political working group of councillors be
established to oversee the above work programme.
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Discussion
2. In New Zealand,
and around the world, governments are looking for innovative ways to address:
a) steadily
raising expectations for better public service provision, including new
infrastructure and new technologies; and
b) a declining
appetite from citizens and elected officials to fund these improvements through
increased rates or new taxes.
3. Sponsorship and
commercial partnerships have the potential to bring in additional revenue,
increase service levels or support new services for Auckland Council, thereby reducing
the cost to Aucklanders.
4. Sponsorship and
commercial partnerships are already an important part of Auckland Council’s
activities and this way of working could be developed further with more
promotion and coordination. This is an approach that is actively being pursued
by other government agencies, most notably the Department of Conservation.
5. International
and local trends show that while fewer sponsorship arrangements are being
entered into, they are bigger in nature with partners driving greater
integration. Sponsorship is now part of corporate strategic planning and there
is a significant appetite from corporates for partnership proposals with real
purpose and substance. There is also a growing focus on local and central
government partnering with the private sector to improve community outcomes and
there is an increasing focus on social outcomes as a key driver to investment,
sponsorship and partnerships.
6. If a more
ambitious and ongoing approach to sponsorships and commercial partnerships is
to be pursued by Auckland Council, then a more strategic, coherent and
coordinated approach across the council group will be important to maximise
impact and deliver better outcomes for council, partners and Aucklanders.
Work
to date
7. Since July 2013,
ATEED has engaged with the council, other CCOs and over 30 potential commercial
partners to identify the appetite for sponsorship and commercial partnerships.
An evaluation of partner types has been conducted including commercial
entities, community organisations, philanthropic individuals and trusts,
delivery partners and media partners.
8. Global
benchmarking and best practice have been studied, a stock take of Council
assets has been compiled, processes have been drafted, policy scoping has
commenced and potential success measures have been identified.
9. The findings
from ATEED’s work to date are that the opportunities are significant and there
is a real appetite for pursing such partnerships in the corporate sector. The
commercial entities that have been approached include some of New Zealand’s
largest organisations. They are enthusiastic about working more closely with
Auckland Council on strategic and long term programmes for Auckland.
10. From discussions
with potential partners through the investigation phase, various opportunities
have been identified. Each demonstrates the bespoke nature of partnerships and
the varying partnership models and outcomes and the benefit of a strategic
centralised and co-ordinated approach. These show the tip of the iceberg depth
of opportunity for Auckland of taking this approach.
11. Potential
partnerships have been identified divided into four categories:
· social
partnerships, delivering improved social and community outcomes
· integrated
partnerships that deliver a range of outcomes for multiple partners
· digital
and media partnerships, focussing on improved connectivity
· local and discrete partnerships,
including providing opportunities for local businesses to get involved.
12. It is envisioned
that the first three partnership types could be managed by a centralised
partnerships team, while the local and discrete partnerships are simple, of
lower value and could be handled by the relevant department at the local level.
13. While the
Auckland Council already engages in a number of sponsorship, partnerships and
contracting arrangements e.g. events and exhibitions sponsorship, these are
usually limited to specific short-term projects. The possibility of the council
engaging in a more ambitious, strategic and long-term approach than traditional
sponsorship and partnerships represents a significant opportunity. Initiating
such a programme, however, brings with it a range of policy and implementation
challenges that will need to be worked through with elected members, including
those on local boards, and the various entities that make up the council group.
Challenges
14. There are number
of challenges that Auckland Council will need to work through if it is to
develop a more comprehensive sponsorship and commercial partnerships programme,
including:
· real and
perceived problems with ‘values fit’ between Auckland Council and partner
organisations
· the need
for clarity between one off events sponsorship and other short-term commercial
arrangements and long-term strategic and substantive relationship arrangements
· tension
between local and region-wide partnership aspirations and decision making
processes
· reaching agreement on
how any revenue flows into and around the council group and into projects
· potential
tension between a focus on delivering sponsorship generating projects with
limited social value versus projects with a high social impact that attract little
or no sponsorship
· perception
that sponsorship partners are receiving preferential treatment via access to
council customers or brand reputation
· concerns about privatisation and
commercialisation of council culture and assets.
15. While clear
policy guidelines are an important part of Auckland Council’s operational
culture, several large organisations reviewed had no formal policy in this area
because they believed that each project and opportunity was unique and the
implications needed to be explored on a ‘case by case’ basis depending on who
is involved in the partnership, and the potential value (including social and
strategic value) of each collaboration or partnership. Other councils, such as
Waikato Regional Council, have already developed sponsorship and partnership
policies that may be useful to build on.
16. It will be
critical to clarify what part of the organisation, or indeed the council group,
is best placed to develop, broker, execute, maintain, and evaluate these
partnerships, especially when there are already a number of sponsorship and
partnership agreements in place across council. There is evidence that a centre
of excellence approach where a high level of capability and accountability for
the partnership programme is clearly identified and mandated is likely to
deliver higher quality outcomes.
Opportunities
17. Based on the
feedback from the organisations reviewed for this paper, the main benefits for
Auckland Council of developing a sponsorship and commercial partnership
programme include:
· additional
revenue streams to fund an increased level of service provision, or to reduce
the cost to the ratepayer of funding the current level of service provision
· engaging
the knowledge, acumen and relationships of the organisations and individuals involved
in any potential sponsorship or partnership agreement
· promoting
a more enterprising, innovative, and collaborative culture within Auckland
Council and between external stakeholders across the Auckland region
· increased participation, engagement and
‘enduring relationships’ with partner organisations in supporting the goals of
Auckland Council – helping to make Auckland the “World’s Most Liveable City”.
18. Auckland Council
and CCOs hold a significant range of assets, programmes, rights and services
that are of value to sponsors and partners. These assets, once ‘packaged’
appropriately to assist partners achieve their outcomes, could add significant
additional benefit to Auckland and private enterprise, and generate alternative
sources of income for growth projects. In summary, the council assets include:
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Events
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e.g. community,
regional and major events
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Facilities and
assets
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e.g. libraries,
swimming pools, community centres
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Programmes
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e.g. Young
Enterprise Scheme, community safety, education programmes
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Attractions
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e.g. SkyPath
walking/cycling path
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Public spaces
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e.g. parks, walks,
conservation activity
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Infrastructure
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e.g.
digital infrastructure, housing, road corridors
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19. The
Auckland sponsorship, philanthropic and community funding market size is
approximately $500 million per annum. Assuming buy in and support from council,
appropriate resourcing, and development of strong Auckland propositions, it is
estimated that a sponsorship and commercial partnerships programme can not only
attract existing opportunities but also achieve new investment, including from
international and global brands seeking the benefits of the Auckland brand
association.
20. The
initial forecast figures have been established to highlight the size of the
potential opportunity with possible revenues and value to the council family
and to Auckland would be up from $3 million in the next financial year,
potentially ramping up to $30 million per annum by 2018.
Next
steps
21. When ATEED was
asked to lead an exploration into the viability of a sponsorship and commercial
partnerships programme, the expected outcome was to have a framework developed
for the new council to consider including:
· a
stock-take of the assets and activities across the council group that have the
potential for either commercial partnership or some other form of external
funding
· the
potential funders or funding sources
· current
relationships and discussions relating to assets
· criteria
for selecting suitable assets or activities and suitable funders
· consideration
of issues such as how the funding would be applied.
22. ATEED has made considerable progress to date, completing road
testing of the concepts with potential partners, discussions across the council
group, an initial high level stocktake of suitable assets and identification of
policy and implementation issues. In order to further progress this work, we
recommend that a small group of councillors be identified to provide oversight
of the work programme and give the project team the opportunity to test its
thinking with elected members as work progresses. Engagement with local boards
will be a critical part of this process.
23. The project team will also be governed by a cross-council steering
group, which will report back to this committee with more fully developed
proposals early next year. The role of the Steering Group will be to provide
governance, strategic direction, cohesiveness of approach
and assist in identifying and prioritising opportunities. They should also be
in tune with the current political and business situation and provide guidance
in this area. It could potentially include Auckland business, community and
thought leaders.
24. The proposed
work programme is:
· agree on political working
party structure and establish steering group
· investigate
and report back on policy considerations
· develop
partnership guidelines
· agree on
which assets, rights and programmes are included and not included
· agree the
financial model and delivery structure
· finalise a
business case and investment plan for consideration
· develop
key messaging to manage private enterprise and public expectations, including
proposition presentation and marketing format
· develop
and agree on the key success measures.
Consideration
Local
Board Views
25. Local boards
will have a high level of interest, as key stakeholders and local asset
managers, in any proposal to move towards adoption of a sponsorship and commercial
partnerships approach. Key issues for local boards will be values fit with
local community aspirations, revenue allocation and decision making allocation.
Any proposal to move towards this model will need to be tested with local
boards in a systematic way.
Maori
Impact Statement
26. Strategic
sponsorship partnerships present an opportunity for increased investment in,
and visibility of, programmes, events and assets that have significance for
Maori. There are already a number of significant sponsorship partnerships
between the corporate and Maori spheres, for example BNZ’s sponsorship of the
Maori All Blacks and the Maori Excellence in Farming awards programme. The
identification of assets and programmes for inclusion in any sponsorship and
commercial partnerships programme and the development of policy guidelines will
necessarily involve consultation and engagement with Maori. This will be
incorporated into the work programme.
Attachments
There are no
attachments for this report.
Signatories
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Authors
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Linda Taylor - Manager Chief Operating Officer Support
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Authorisers
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Dean Kimpton - Chief Operating Officer
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