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Saturday June 9, 2012

Top-flight thrills

ProEvents International has made a business of organising football exhibition matches and pre-season tours in this region.

WHEN Arsenal, Liverpool and Chelsea played at the National Stadium in Bukit Jalil last July in the span of eight days, it not only belatedly celebrated the 10th anniversary of ProEvents International Sdn Bhd in Malaysia, but also raised the bar in the event-promotion industry. Football, as the company’s co-founder and CEO Julian Kam observed, has evolved into global spectacle and ProEvents is in pole position when it comes to bringing the spectacle to Asia.

Now celebrating its 20th year in the football business in Asia, ProEvents is regarded as the leading football marketing and management consultancy with offices in Hong Kong, Malaysia and Singapore. ProEvents has organised and promoted more international football matches in Asia than any other company.

Teams brought in for international friendly matches include Manchester United, Chelsea, Arsenal, Liverpool, Aston Villa, Blackburn, Barcelona, Bayern Munich, Leeds, Inter Milan, Sampdoria, Fifa World Stars and the national sides of Brazil, England, Argentina, Portugal, Bulgaria, Finland, China, Japan, South Korea and Yugoslavia.

Flashback: Football fans Nur Alifa Lia-Diwana Aliff and her younger sister Nur Hanna Sabrina holding up Malaysia and Liverpool scarves during the friendly match between the club and Malaysia at the National Stadium in Bukit Jalil last July. This ProEvents match attracted a bumper crowd of 80,000 fans — a standard that the company intends to maintain with all its friendly matches here.

In Malaysia, ProEvents has delivered matches featuring Brazil’s national side and Premiership teams Manchester United, Arsenal, Chelsea and Liverpool in recent years.

This has made ProEvents attractive to investors from England and Asia. Hong Kong-born Kam admitted that there was an approach by interested parties two years ago that ended when they did not follow through. However, he said that ProEvents is “always open to any ideas (which) can (allow us to) expand.” Any potential investor, of course, must familiarise himself with the hands-on management that ProEvents practices and the nature of the business.

Keeping the standards

The achievements of ProEvents lie in its organisation. Kam emphasised that they have constantly prioritised time rather than risk management and everything flows from that attitude and it is widened to cover their local tour partners.

“If we are just licensing out (the tours), we won’t be able to keep the standards and the quality of service that the clubs expect and they will compare the management from one country to another. Here, they have the luxury of landing and leaving on the tarmac … they don’t have to go through customs. In Hong Kong, Singapore and China, they have to queue up at a special counter and they don’t get outriders (like they do in Kuala Lumpur and Bangkok),” he said.

When ProEvents landed their first major gig in 1995 — bringing Manchester United to Malaysia — they did not face such a huge bill and operations. As the Premiership grew in fame, it became a big business and ProEvents set up to host between 120 and 150 people for any club and cater to the clubs’ various requests.

Familiar face: ProEvents International chief executive officer Julian Kam will be bringing Arsene Wenger and his Arsenal team to Kuala Lumpur once again on July 24.

“The top clubs travel on chartered flights and it costs us a bomb. They used to travel in economy (class) and (had) twin-sharing (for the rooms). Nowadays, it’s double room, single occupancy. Everything has changed, even the menu and (players’) diet … it used to be buffet; now it’s specific requirements even down to canned products and their brand. If we don’t have them here, they bring it over.”

The big show

The dynamics that govern other commercial undertakings do not extend to these ventures, which are akin to organising tours by Top 10 pop acts. Pricing strategy and, to an extent, risk management remain decisive, though, Kam has developed a steady sense of fearlessness — the same audacity that led him to navigate the three Premiership giants into Malaysia, Thailand and China last year.

The Asia Tour 2011, surprisingly, was not the most lucrative that ProEvents had put together. Kam revealed that major names do not translate into big money as each club has its different requirements and the size of the contracts. In other words, flying in headliners Manchester United does not guarantee a huge payday, which is part of the quirkiness of the business, while the income generated also varies from one tour to the other, loading the operations with pitfalls.

The deal becomes more complex with the high appearance fees of the leading clubs. In 2003, Real Madrid were initially knocked back after reportedly demanding ‚2mil (RM8mil) and 40% of the gate collection to play China in Hong Kong. The first generation Galacticos eventually preened in Beijing and were invited back to the country in 2005 and 2011.

Meeting El Nino: Kam sharing a moment with Chelsea superstar Fernando Torres during the Premiership’s team's visit to Kuala Lumpur last year.

As much as Kam appreciates that the clubs need to generate money, it is essential that they also understand that they are participating in the tour to build their fanbase and that ProEvents is helping them to popularise their clubs.

“If you are charging what the fans in Asia cannot afford to pay, then what’s the point? Surely, you don’t want to see an empty stadium? We believe in our ticket pricing, which we have not changed in the last 10 years. These tours are also beneficial for the clubs because they are real eye-openers. Last year, Jack Wilshere was awed by the size of the crowd at Bukit Jalil and (Didier) Drogba was running back to the changing room to grab his camera to take a 360° photo of the stadium,” recalled Kam.

“They don’t see that kind of following on their travels in Europe. Stamford Bridge has a capacity of almost 42,000 and we had almost double that figure (at the National Stadium, Bukit Jalil) for their visit last year. For most of these players, they have never been exposed to the following that they have in Asia and they see it for themselves (on tour) how popular they are.”

Budgeting is a principal consideration in selecting the clubs. While Kam was reticent over revealing any figures, he provided an approximation that included the stadium’s capacity and an average ticket price of RM60 per-head. This works out to RM5.1mil for any club wanting to play a match at the National Stadium, Bukit Jalil, and any club asking for more than that are bound to be rejected. Kam believes this functions as a safety measure against what is perceived as a dicey business.

“For us, it’s a calculated risk … we don’t take on more than we can chew. We know where we stand and we are a small company and there is a limit. But then again, we are covering the whole of Asia and we are comfortable. The revenue model is based on the sale of tickets, television rights and sponsorship, which is very much how the clubs run their business. The beauty for us is that … we don’t work in one country; we work Asia-wide and have a presence in any football country,” said Kam, who now makes Kuala Lumpur his home.

“You cannot say that the bulk of our revenue is derived from gate receipts … you can’t calculate that because you won’t know how many people will be buying the tickets. Like in any other business, there is a risk factor (and) at the end of the day, if you lose it is down to a purely a business decision. But luckily for us, we have not made a loss.

“It’s a matter of how much you are going to make and equally how much you are going to lose. So, for us, it’s a calculated risk. There is no fear … a lot of time, we follow what the market wants and the trends. In our business, we have to choose (the clubs well) ahead of the tour, for example, Manchester City. We proposed to have City nine months ago and they were agreeable (to it) straightaway.”

Man City, the current Premier League champions, will play the national side at the National Stadium, Bukit Jalil on July 30. Tickets are priced between RM58 and RM388.

At the start of December, City were the toast of the Premiership and enjoyed a five-point lead over United while Arsenal were out of the top four. But in February, the Red Devils were leading City by two points, with a game in hand, and Arsenal were in contention for Champions League football. Even in March, when United surrendered their eight-point advantage to allow City to return to the summit on goal difference and Kam was bracing himself for another twist, he was not overly concerned.

Pulling power

ProEvents do not decide on the clubs based on their performance alone. The entertainment value provided by a club and their star quality take priority over other considerations. They also monitor the club’s activities in the transfer market and their progress, though not all clubs are gauged by the same selection process. Chelsea, Kam said, is a sure-fire choice as they have been winning consistently, have a huge fan base in Asia and have been tour regulars.

A survey, conducted by SportMarket on behalf of the Premier League, shows Chelsea has 44 million fans in Asia and the Far East while Liverpool has 33 million.

On a global scale, Manchester United has 354 million supporters worldwide, Chelsea has 134 million, Arsenal has 113 million and Liverpool has 71 million.

Kam also sees that there is no need to guard against appearance fatigue. Arsenal, which returned to tour Asia after a 12-year gap, were very impressed with their reception in Kuala Lumpur last year. The club began talks with Kam in London to return to the KL – which is the only stop in South-East Asia (this July 24) – within days after the end of their last tour. Kam feels that people now want to regularly see their club idols — and new signings — in the flesh and ProEvents obliges as the tour also contributes to the economy.

During the Sports Industry Year 2011/12 and Sports Industry Convention last July, the Youth and Sports Minister Datuk Seri Ahmad Shabery Cheek estimated that if each of the 234,000 fans — locals and those from abroad — who watched Arsenal, Liverpool and Chelsea play against Malaysia had “spent about RM200 on food, tickets, transport and souvenirs, it could have generated RM50mil for the economy of the country.”

Kam also pointed out the huge significance of “brand” Malaysia gaining media exposure around the world.

The question of legacy often crops up whenever the clubs have hopped on to their airplane and, over the years, and Kam has been advising the clubs to dispense with the smash-and-grab approach and allocate time to reach out to their fans. Most clubs have responded by including such activities for their followers and ProEvents are planning to get clubs to engage in grassroots programmes.

Kam is serious in wanting to play a part in advancing domestic football and has been engaged in discussions with the Football Association of Malaysia and the clubs to establish working relationships. As the middlemen, ProEvents is willing to supply assistance and fit into the plans of both the FAM and the clubs. This is their next goal, apart from planning for next year.

Two months ago, ProEvents kicked off the groundwork for 2013 and Kam, holding the details close to his chest, was only willing to disclose that the tour would be “bigger” than this year’s edition. He laughed when it was put to him that he is scheming to match the hat-trick of 2011 and responded that he certainly needs to turn to investors when a six-club tour was suggested.

Arsenal and Manchester City will both play Malaysia XI on July 24 and 30 respectively at the National Stadium in Bukit Jalil. Browse (www.ticketpro.com.my) or (www.proevents.com)

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