The EconomistFebruary 15th 2020 Business 551W
hen fernando marçalscored a ris-
ible own goal in a match against Paris
Saint-Germain on February 9th, his Lyon
football team’s supporters watching on
television screens prayed their eyes had
deceived them. And deceive them they
did—just not in the way that would answer
their prayers. The advertising hoardings
they saw around the pitch’s perimeter were
not those seen by Lyon fans unlucky
enough to witness Mr Marçal’s howler in
person at the stadium. The televised ver-
sions were conjured up virtually.
Virtual advertising works by placing in-
visible infrared signals in signs to distin-
guish them from other objects in the fore-
ground. Images can then be superimposed
onto them in a live tv broadcast. Viewers in
Tianjin might see the logo of a local bank
behind the penalty area, while those in Ti-
juana are tempted by a Mexican beer.
Football clubs are understandably keen.
Commercial income, made up mostly of
sponsorships and advertising, earned Eu-
rope’s top 20 teams €3.6bn ($3.9bn) last
year. Allowing companies to tailor their
pitch-side messages to specific audiences
could boost this by 40%, reckons the boss
of one sports-marketing company.
Last month Real Madrid appointed img,
a sports-management company, to sell this
unreal estate on its behalf. Teams else-
where in Europe have begun to use the
technology in recent seasons. So, too, havetop-flight ice-hockey and basketball
leagues in North America.
Tailoring ads to all tastes has limits. Too
many sponsors may hurt a team’s brand,
says Jean-Paul Petranca of the Boston Con-
sulting Group. Manchester United, which
raked in £173m ($224m) in sponsorships
last year, has been mocked in the past for
endorsing everything from bedding to in-
stant noodles.
Still, virtual hoardings are here to stay.
In the future, says James Gambrell, boss of
Supponor, a supplier of the technology,
sponsors could target an audience based
on its demographic profile or the device or
platform of choice (owners of Apple’s gad-
gets are generally better-off than those us-
ing Android devices).
For the time being, it can help clubs
keep controversial partners while placat-
ing an irate public. Last week British book-
makers, which bankroll half of the teams in
the Premier League, announced that they
are considering withdrawing from adver-
tising on the side of the pitch after vocal
criticism from anti-gambling campaign-
ers. In France Lovebet, a big gambling com-
pany that sponsors Paris Saint-Germain,
uses virtual advertising to reach viewers in
Asia, where placing bets is legal and popu-
lar, but not in Europe, where it is restricted
in some markets. This can spare clubs
plenty of jurisdictional headaches—if not
blushes for blunders like Mr Marçal’s. 7Admen have a clever new way to trick sports fansRemote advertisingHoarding cash
M
ost bosses dread Elliott Manage-
ment, an American activist hedge
fund whose tactics the traumatised chair-
man of a German company once described
as “psycho-terror”. After news leaked on
February 6th that Elliott had taken a 3%
stake, worth over $2.5bn, in SoftBank
Group, a Japanese telecoms-and-tech con-
glomerate, its flamboyant founder, Son
Masayoshi, seemed less perturbed. As he
presented SoftBank’s results on February
12th, Mr Son professed to be “thankful that
such a distinguished investor has joined us
as a friend”. He has reason to sound wel-
coming. SoftBank’s languishing share price
leapt by 7% on the news of Elliott’s stake.
Elliott’s main focus at SoftBank is the
Vision Fund, Mr Son’s $99bn tech-invest-
ment arm. Although SoftBank’s stake in the
fund amounts to only 13% or so of the
group’s total gross assets, the vehicle is
causing a crisis of confidence. Last year its
handling of WeWork led to the scuttling of
the loss-making property firm’s listing, fol-
lowed by a costly bail-out. That is when El-
liott began to build its stake in earnest.
SoftBank’s earnings also disappointed.
Overall the group eked out only $24m of
operating profit. The Vision Fund lost $2bn
in the last quarter, better than the $8.9bn
loss in the previous three months but far
worse than the market was expecting. This
month, one Vision Fund investment, an e-
commerce startup from San Francisco
called Brandless that received around
$100m from Mr Son two years ago, became
the first in the portfolio to fold. A rare bit of
good news came on February 11th when an
American judge approved the $26bn take-
over of Sprint, a mobile operator majority-An American activist investor wants
SoftBank to reform. Good luckElliott v SoftBankSinger-Son time
Falling on hard times
Operating profit/loss, $bnSource:Jefferies1050-5-10
2018 2019SoftBank Group0.021050-5-10
2018 2019Vision & Delta Funds