After winning its first ever premiership last year, the National Rugby League (NRL) team, Cronulla-Sutherland Sharks are embarking on a transformation project that is taking it down paths few others in Australian professional sport have travelled.
This should secure a sustainable future for the mighty Sharks, not only for players and fans, but also for the organisation as a business.
The Cronulla Sharks rugby team dates back to 1967, but it wasn't until last year that it finally rewarded its fans by winning the premiership against Melbourne Storm.
This win has given it a strong foundation on which to build. However, in today's fragmented sports and entertainment markets, teams need to deliver much more than a winning performance to engage fans and remain profitable.
Cronulla's vision statement reflects this reality. It aims to be “Australia's leading, sporting, lifestyle and entertainment destination, loved, embraced and respected for the positive impact we have on our community and its people."
The club's strategy comprises of five pillars:
· The Cronulla-Sutherland Sharks Football Club
· The Cronulla-Sutherland Sharks Leagues Club
· Southern Cross Group Stadium
· A residential and retail property development at Woolooware Bay
· Sharks Have Heart, the charitable foundation.
Each pillar requires a different commercial strategy and engages a different stakeholder group.
Focusing on data for customer engagement
COO Andrew McVeigh describes the Sharks' new focus on investing in a comprehensive data strategy and embedding management reporting throughout the business.
“Finance plays a big part in driving the business forward through reporting and accountability," he says. "However, the data strategy implementation is across the whole organisation, and all team leaders are providing significant input."
McVeigh says the data strategy aims to uncover fine details about the business' customer base and the potential value it creates for the business.
“We aim to understand the value a customer brings to our organisation across each of our five business lines and how we specifically engage our customers with a personalised touch. We need to create appropriate offers for them across the group," he explains.
In granular terms, the strategy will ensure that - for example - they don't market beanies and scarves to fans in Darwin where the temperature averages 24 degrees at the height of winter.
But on a more strategic level, it means developing a data bank so that the Sharks have up-to-date information to support the needs of each of its five pillars.
The five pillars have diverse information needs. For instance, the football club and the group's property development arm need very different data. The strategy will address the information needs of each pillar independently, assessing how to improve access to information and make it more relevant, so that stakeholders can be engaged in a personal way.
The data strategy implementation has been underway since the start of the year. Right now, work is being done on the specific information routes through which the business will collect data. The club's fans are at the heart of this strategy, with everything designed to support their engagement with the group.
McVeigh confirms that the new data strategy will be an ongoing priority for the organisation, as data-driven decision making will underpin the group's future development.
A venture adventure
Sharks Ventures is a new business unit under development and acts like a start-up incubator, generating business concepts that the Club can use for its advantage, but the majority of its time is spent on exploring the potential to produce spin-off businesses as new ventures.
One of Sharks Ventures' earliest businesses provides a range of professional services to help other organisations grow more quickly and reach more widely. These are also extended to the Club itself to help it become more agile.
Another Sharks Ventures initiative is a partnership with Ito En, Japan's largest green tea distributor. Ito En grows high quality green tea in country NSW, following a grant and invitation to do so in the mid-90s. The advocacy of Sharks Ventures has helped to secure an increase in new business for Ito En.
Sharks Ventures' services include raising equity, strategy and planning, supply chain optimisation, sustainability and corporate citizenship. Jonathan Prosser says the focus is on improving business performance.
“It's not so much about the buzzword of “innovation"; it's about thinking creatively in the context of contributing to the long-term financial viability of the Sharks Group, and then launching and running successful businesses," he explains.
Prosser says Sharks Ventures has produced six-figure revenues in three months with no seed funding.
A bright future through corporate development
Another of the club's projects, the Pacific Diplomatic Forum, creates innovation in diplomacy through sport by facilitating dialogue with six neighbouring nations. “The idea is to have an open discussion about trade development and international relations using sport as the vehicle for change," says Prosser.
The Sharks' wide-ranging approach to business development is unusual for a football club, and could be interesting for other CFOs. While not every business has access to the resources and scope of businesses available to the Sharks, many companies could potentially learn from its out-of-the-box thinking about revenue generation and relationship building.
It's an exciting time for the Sharks. The club's future looks bright not just because of its team performance, but also because of its comprehensive strategy for corporate growth.
- Delivered $51.6 million in media value to its partners in the 2016/2017 financial year.
- 75% year-on-year growth across all digital platforms
- Combined financial operating revenue of the Football Club and Leagues Club grew from $22 million in 2012 to $37 million in 2016, a 68% increase.