Ciaran Hancock on sponsoring the GAA; competition in the radio market; cheap flights and whiskey sales.

Game on for Sponsors

The race for the Sam Maguire isn't the only competition kicking off this weekend. The GAA is preparing to launch an exhaustive search for sponsors for its crown jewels - the All Ireland senior football and hurling championships.

It won't come cheaply. New sponsors will need to be prepared to cough up at least €2 million a year for the privilege.

Bank of Ireland and Guinness will be given first refusal, in recognition of their long-standing support for the football and hurling titles respectively over the past decade or so.

Recognising that the championships carry huge appeal across the 32 counties, the GAA has decided to move away from having a single sponsor for each event and is introducing a UEFA Champions League-style structure.

This means that the championships will each have three sponsors, maybe a bank, a car company and a drinks group. Among other things, it should lessen the furore within the association about having an alcohol company as a lead sponsor for hurling. Companies will be expected to pay more than €1 million each per year to the GAA, as well as committing to a support spend of at least €750,000 to promote matches.

In return, the GAA plans to streamline branding within stadiums. About 50 brands appeared in Croke Park last season. In future, only the core title and media sponsors will get a plug in grounds hosting live matches. Companies supporting the championships will also get sponsorship of television coverage. "We want to market our games more," says Dermot Power, the GAA's marketing chief. "If you have a number of brands involved with the championships, clearly the sports will benefit."

The GAA has hired a company called Sports Metrics to place a value on the All Ireland championships. Given that 1.7 million attending last season's championship matches and that the games are big ratings hits for RTÉ, there should be no shortage of takers and the GAA can expect to increase the net €4.7 million it earned from its various sponsorships last year.

Easy listening but hard competition

While Emap seeks bidders for its three stations - Today FM, FM104 and Highland Radio - a number of groups are lining up bids for the multi-city licence offered by the Broadcasting Commission of Ireland.

The BCI is seeking applications for an easy listening music service for over 45s to be available in Dublin city and its commuter belt, Cork, Limerick, Galway and Co Clare. This gives it a population base of about 1.6 million.

Those thought to be looking at the franchise include a consortium involving Today FM; TV3/ Doughty Hanson; former Lite FM founder Martin Block and his brother Howard; UTV and another including radio executive Dan Healy and Denis O'Brien's Communicorp. Some British groups could also be in the mix.The licence offers the opportunity to reach the main urban markets without bearing the costs of running a full national service. With the right format, it should prove attractive to advertisers, who are expected to spend about €135 million this year on radio.

On the down side, the ever increasing number of licences being offered by the BCI means there will be more mouths to feed from the advertising cake.

Competing with RTÉ and its €180 million in licence fee revenue will be no easy task. Investors are looking at start-up costs of €5 to €6 million and annual revenues of €3-€5 million, making it a tough ask to earn a return on the licence in the short term.

All talk on the radio sale

Some interesting nuggets of information are contained in the sale document for Today FM, FM104 and Highland Radio, released this week.

It shows that FM104 generates income from its Fás-sponsored Roadhog bus of €208,000 a year.

Revenue from Flycatcher Media, which operates the maybefriends.com social website and is an offshoot of FM104, was €142,000 in the 12 months to end of March.

FM104 has also launched a website for the Polish community here, called pl104.ie, which is said to be "highly successful". And while Today FM and FM104 pay €500,000 between them for their Dublin-based studios, Highland Radio spends a modest €31,400 a year for its premises.

Buying Emap's Irish assets will also give the new owner a 15.2 per cent interest in Independent Network News, which provides news services to commercial radio stations.

Of less value, however, is the 0.91 per cent stake in Newstalk, a legacy of FM104's involvement in the early days of the station when it was a Dublin-only talk service. The group is understood to be owed a sizeable six-figure sum by Newstalk.

Given that the Denis O'Brien-controlled quasi-national station has accumulated debts of more than €14 million, which O'Brien has conceded is unlikely to be paid down in the 10-year term of the national licence, this is a debt that any new owner might just as well write off.

Bumpy ride

When the number of seats being filled on Ryanair aircraft shows signs of declining, Michael O'Leary dumps a load of cheap flights into the market and gets a pile of free publicity. This week he announced plans to sell 10 million flights for €10-€20 apiece, including taxes and most charges. It got coverage across Europe.

Contrast that with the decision of Aer Lingus to hike its fuel surcharge on long-haul services at a time when the number of seats being filled on these flights is also in decline. In the first four months of this year, the numbers travelling to the US and Dubai with Aer Lingus declined by 1.8 per cent to 331,000.

Its load factor went from 78.8 per cent to 76.2 per cent. On Wednesday, Aer Lingus increased the fuel surcharge on services to Dubai and the east coast of the US by €10 each way and to the west coast of the US by €15 each way. This reversed cuts introduced in February - at a time when two new aircraft are set to come on stream, adding capacity to its long-haul routes.

Aer Lingus has still to agree its restructuring plan with trade unions with both sides expected to go back to the Labour Court next week. O'Leary's decision to spark a price war will put the squeeze on Aer Lingus's short-haul services, which have also experienced declining load factors this year. About two million of these cheap Ryanair flights will operate in or out of Ireland.

Aer Lingus shareholders should buckle their seatbelts, they could be in for a bumpy ride this summer.

Cheery whiskey sales

Maurice Pratt this week described Tullamore Dew as a "shining star" in its portfolio of spirits and liqueurs. The Irish whiskey brand is shifting more than 500,000 cases a year, roughly treble its output of a decade ago. It now represents one-eighth of all branded Irish whiskey sales every year.

Deliveries to retailers were up an impressive 16 per cent in the year to the end of February. Tullamore Dew is particularly strong in northern Europe and many of the EU accession states and is also doing well in the US.

Irish whiskey is in vogue throughout the world. Sales grew by 90 per cent in Russia last year.

Given Tullamore Dew's established brand, its dominance in certain European markets and strong growth over the past decade, industry players estimate that it could be worth $1,000 a case or more than $500 million if put up for sale. This would equate to about €370 million or €1.13 a share and could be a conservative valuation. Cheers.