2013 was a year of consolidation and strategic development for Chime's sports marketing and entertainment division. As expected, revenues declined following the 2012 Olympic and Paralympic Games. However, we generated good performances from our brand consultancy and rights management businesses whilst building our leadership team, and making strategic acquisitions that open up important new markets.
CSM Sport & Entertainment puts brands at the heart of the world's greatest experiences. It includes the brand consultancy Fast Track, the athlete representation, rights management and activation business Essentially, the branding and wayfinding business Icon and the full-service global event business iLUKA. Following acquisitions during 2013, it now also includes the world's leading motorsports sponsorship agency JMI, and Shanghai-based People Marketing. As a result of these acquisitions, the division now has operations in the US and China as well as Brazil, Qatar and Abu Dhabi.
2013 Performance
Because the world's largest sporting events take place in even-numbered years, the revenues and profits of Icon and iLUKA, our two businesses with activities most directly related to these events, tend to follow a two-year cycle. In 2013, the year following the 2012 Olympic and Paralympic Games in London and preceding the Winter Olympics in Sochi, the Commonwealth Games and the FIFA World Cup in Brazil, revenues and profits for these businesses inevitably declined. This decline was exacerbated by some aspects of preparation for the World Cup beginning later than expected, which will have the impact of increasing revenues in 2014.
Elsewhere, there were good performances from Fast Track, which took the lead role in activating HSBC's sponsorship of the successful British and Irish Lions tour to Australia. The agency delivered a growing volume of sponsorship work for Land Rover, a fellow sponsor of the Lions tour, and continued its excellent sponsorship activation activity for Lucozade Sport. Meanwhile, Essentially forged the deal that makes Waitrose the shirt sponsor for the England cricket team, just part of a solid performance that also saw the agency pick up significant activation business from PruHealth Vitality, sponsor of the International Triathlon Union.
The motorsport opportunity
The acquisition of JMI, which was completed in November 2013, brings the world's leading motorsports sponsorship agency into the CSM Sport & Entertainment stable - and expands the division's global footprint in two important ways. Through motorsport, the division has access to significant new, annualised income streams that will offset the cyclical nature of our events-related businesses going forward, and through JMI itself, it has established a firm foothold in the valuable US market.
JMI handles sponsorship, rights management and activation for three separate motorsports: through F1 it reaches a global audience of more than 2.5 billion cumulatively, through IndyCar it provides access to a highly engaged audience of TV viewers each season, and in NASCAR, it has a lead role in the second-most watched sport in the US, with an annual TV audience of over 70 million.
As the leading sponsorship agency for these three sports, JMI is a powerful, complementary addition to the division, and its strong relationships with US TV networks provide a firm foundation for leveraging expertise in other sports within the US market.
Expanding our global footprint
During the year, the division also acquired the Shanghai-based communications and event management business, People Marketing, which greatly strengthens our presence in one of the most important emerging markets for sports sponsorship. People Marketing strengthens our offer to existing clients and other international brands looking to grow their presence within China, and also provides us with access to the growing market of Chinese companies seeking international sponsorship deals to help grow their global profile.
Strengthening our board
Our first full-year under the Chairmanship of Lord Sebastian Coe has been a positive one for the long-term development of the division, and we have made further moves to strengthen our board during the year.
JMI's founder and CEO Zak Brown has taken on an additional role with the CSM Sport & Entertainment board, overseeing global business development. Ian Priest, one of the co-founders of VCCP, also joins as Chief Operating Officer. The pair will work with Lord Coe, CSM Chief Executive Jim Glover and Deputy Chairman Edward Leask.
Building a divisional identity
Over recent years, CSM Sport & Entertainment has grown to be one of the world's largest sports marketing businesses, with 21 offices in 15 countries. Developing a clear, unified visual identity for the division will enable us to take full advantage of this increasing global scale, and this was a key priority for the leadership team during the second half of 2013. We will be rolling out this new identity during 2014.
Outlook for 2014
The outlook for the division in 2014 is positive, with significant activity for our businesses around all of the year's three major sporting events. In addition, we look forward to a positive contribution from both of the companies acquired in 2013.