Most people think of the Portuguese explorer when they hear the name Magellan. They’ve never heard of the global equities fund manager that has paid millions to attach its name to the 2017-18 Ashes series.
But, by the end of the summer, Magellan Financial Group hopes it will be a household name.
Its name will be plastered around packed sporting grounds and repeated ad nauseam by commentators as the Ashes series, starting today with the first Test in Brisbane. Even though the heart of the 140-year-old contest is between just two countries, the Ashes is being broadcast in 130 countries around the world.
For visitors, too, the Ashes contest between England and Australia remains the pre-eminent event that lures an estimated 30,000 Poms halfway across the globe. That is about 14% more than visited in the same period last year. Everyone, from beer brands to restaurants to online betting companies will be cashing in on the likely A$400m (£228m) boost to Australia’s gross domestic product, as fans travel over for one, some or all of the Tests in Brisbane, Adelaide and Perth, and the holiday season Tests in Melbourne and Sydney. Based on analysis of previous Ashes, they are likely to stay an average of 30 days and spend more than $10,000 a person.
Magellan has paid an undisclosed figure, said to be around $4m-$5m a year, for the naming rights to Test cricket in Australia for three years, with an option of a further two.
Magellan’s executive chairman, Brett Cairns, acknowledges that Magellan is relatively unknown outside financial markets, despite having $50bn under management and several funds listed on the Australian Stock Exchange.
“We hope to raise brand awareness beyond the financial industry and expand our business with self-advised investors,” he says, adding that it has meant a big jump in their marketing spend.
The company was approached about sponsoring Test cricket last year after the Commonwealth Bank declined to renew its $50m four-year sponsorship deal beyond last season. Instead CommBank has put its money into grassroots and women’s cricket.
That left a big hole for Cricket Australia. Instead of seeking one sponsor for men’s cricket it followed the lead of the England and Wales Cricket Board and split the naming rights into smaller packages. Others have picked up the one-day games and shirt sponsorships.
“It was presented to us, we did the work on the demographics and Test cricket had the best overlap in terms of household income and other metrics,” says Cairns, who says he likes cricket but would not regard himself as a cricket tragic.
The five-day Ashes Tests remain the game of the purists and the major money spinner for Australian tourism, partly because the contest runs for weeks. The final Test doesn’t wrap up until January.
“The Ashes, like the British and Irish Lions rugby tours, are tourism gold for Australia,” said John O’Sullivan, the managing director of Tourism Australia.
“These are visitors who stay longer, disperse more widely and spend well, both during the games and between them, visiting our shops, restaurants, beaches, wineries and other attractions.”
One of the big pluses of the Ashes is that it is played in several Australian cities, spreading the benefits across states and prompting significant spending on airlines and hotels.
Qantas, a partner with Cricket Australia, will for the first time live stream the Ashes and other games on many of its domestic aircraft using next generation wifi and the NBN satellites. It is also offering a dedicated highlights channel on its entertainment systems to encourage fans to fly with it.
There are strong signs this Ashes will be a blockbuster. “We saw a significant spike in UK visitors and spending during the 2013-14 series and the forward bookings analysis we’ve seen so far indicates that we’ll see similar numbers this time round,” O’Sullivan said.
“With overall honours tied at 32 [series] wins, this series has added bragging rights but I’m happy to predict a winner and that will unquestionably be Australian tourism.”
According to Cricket Australia, ticket sales have been stronger for 2017-18 than for any other Ashes series, with the first, second and third days sold out in most locations except the 100,000-capacity Melbourne Cricket Ground, which is nonetheless already sold out for the first day’s play on Boxing Day.
Australians might be miffed by the raucous behaviour of the Barmy Army but they certainly don’t mind their cash.
The last in-depth analyis of the economic impact of the Ashes in 2007-08 by consultants URS found it generated $317m for the Australian economy and created 793 jobs. Ticket sales generated $18.7m and 37,000 international tourists came down under of which 64% came specifically for the Ashes.
A similar economic analysis by PwC was undertaken after the 2015 World Cup. Hosted by Australia and New Zealand, this joint event lured 1.2 million spectators, measured by unique ticket sales, of which one quarter were from overseas. That translated into 1.6m bed nights across the two nations and direct spending of $1.1bn.
The effects of cricket-inspired tourism appear to be long lasting. There was a noticeable bounce in Indian tourists arriving over the 2015-16 summer when India played a two-match series. Since that time, arrivals from India have continued to grow at 15.3% a year, making it one of Australia’s fastest growing emerging markets. Nearly 300,000 Indians have visited Australia in the year to September.
Now Cricket Australia is looking at how to prolong the long, hot lucrative summer of cricket.
The Women’s Ashes series, which has just finished, has underlined the scope that the women’s contest offers to extend the cricket season. More than 12,600 fans attended the picturesque North Sydney Oval to watch the third Test live and were rewarded with Ellyse Perry’s stunning double century.
More than more 220,000 Australians logged on to cricket.com.au to watch the match live, after the Nine Network decided not to broadcast it. BT Sports broadcast the game on one of their channels for fans in the UK, while the game was also live streamed into India via SonyLiv. Meanwhile the one-day and T20 components of the Women’s Ashes were shown on a combination of Nine’s digital channel, 9Gem and, after public pressure, on the main network.
The strong showing has provided further reason for Cricket Australia to press ahead with plans to make October a month for standalone women’s fixtures.
Channel Nine, long associated with the game, is now in the last year of its $500m five-year broadcast deal, which gives the network rights to Tests, one-day matches and is expected to re-bid for the rights. Network Ten, which is about to be rescued from receivership by the US network CBS, picked up the popular Big Bash League for $20m a year in 2013 but it remains to be seen if Nine will demand an all-or-nothing deal as part of the negotiations.
