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Could 'sponsorship matrix' be the answer to financial uncertainty?

Architects confronting a recessionary future should maximise their skills, cast their net wide and not just stay in the cycle lane. As I have remarked before, there are more unconventional businesses coming into existence than there are conventional firms going out of business.

This is not a rerun of dot-com madness and a lot of people losing their money, and we must learn to talk about that period as though it was ancient history. There are many more promising avenues to explore.

Take sponsorship, which is even now showing the next generation of buccaneers how to beat a winner by losing.

Sponsorship is not the simple business it used to be. As a means of raising money, it has become immensely complex, extending its reach from prizes and awards for children's poems, to concerts, exhibitions, books and films, city marathons, the Olympic Games, motor racing, world chess tournaments and prestige yacht races. Surprisingly, it is the last of these that has turned out to be the most fertile, becoming in 40 years a sophisticated field of financial entrepreneurship that can stand comparison with the most elaborate development deals the property industry ever put together.

When the sponsorship of sailing events first began in the 1960s, it was a simple matter of giving some money to the owner of a racing boat to pay for its preparation for a race or feat of endurance. In return, the sponsor got a company name on hulls or sails or both.

Today that simple transaction has been bisected and multiplied one hundredfold to produce an enormous number of sponsorship opportunities for a much bigger process called 'relationship marketing'. Under this new scheme of things, a round-the-world yacht race between, say,14 boats, would command not 14 but more than 200 sponsors. This is because there will be at least four layers in what is called the 'sponsorship matrix'. The first, the master company, would own the idea of the race but it would sell the title of the event to a main sponsor for, say, $5 or $6 million.

This sponsor would then sell the name of each yacht for about $750,000; each crew place on each yacht would go for about $40,000, and each name-purchaser would 'sub-let' additional sponsorship slots to as many as 30 smaller firms to exhibit their names.

Finally, the event-owning company itself would run a stable of minor sponsors, who would have paid something like $25,000 to be mentioned in connection with the race. This way all the investment in the race would far exceed the cost of sending the boats round the world. The balance would be pure profit. If only buildings could be financed in this way!

But wait, there is something else to be learned from marine sponsorship. This year's America's Cup - the culmination of a series of races off Auckland, New Zealand, that started five months ago - has resuscitated the kind of challenge first mounted by Ralph Lauren when his Polo label sponsored the 1992 winner, America3, and a range of leisure wear was sold on the back of it.This year, the sponsorship challenge has come from Prada.

A firm that not only produced a range of designer sailing kit five years ago labelled 'Challenge for Americas Cup 2003' that has outsold all the other merchandise offerings by other teams, but entered its own boat, Prada.Unhappily, Prada did not match the achievement of America3 and has been eliminated. But the Italians showed that a yacht can sponsor a sou'wester as well as the other way around.

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