Chapter 10 Sponsorship

Chapter Objectives 1.Define and distinguish between different levels of sponsorship in the United States 2.Uncover possible sponsors and determine who is responsible for making the decisions 3.Identify a good sponsorship fit 4.Identify trends regarding sponsor–property relationships 5.Outline the importance of objectives, activation, and evaluation 6.Explain the components of sponsorship agreements

Sponsorship Legal contract between a sport property and another entity exchanging something of value, whether cash or in-kind, wherein the sport property allows the sponsoring organization the rights to commercialization of its brand and the resulting benefits derived from these actions. A company or sponsor pays for the right to be associated with the sport organization or property. Can occur in a direct cash payment or by exchanging some service for these rights such as a local media outlet running television advertisements in exchange for tickets to games.

Levels of Sport Sponsorship National, large regional, regional, small regional, large local, local, small local National level sports involve interest from one or possibly two countries such as the Super Bowl or the World Series. – These events have national television coverage, as well as spectators who travel from around the country and are not focused only on the host city. Regional organizations or events are more geographically limited. – This may include individual professional teams such as the Atlanta Falcons of the National Football League (NFL) or college sports teams like the Ohio State University. Local levels have the narrowest geographic focus, usually a city or community, and usually appeal to a specific segment in the area (e.g., high school sports, minor league sport).

Interconnectivity of Levels One of the reasons it can be difficult to clearly differentiate the levels is due to the marketing activation process. A company buying at a national level will still want to create platforms for activation down through even to specific local areas. Simply running a national television advertisement is not enough to engage consumers with the products or develop more personal relationships with them. Sport can be useful for these levels of activation.

Sponsorship Inventory Facility naming rights Perimeter advertising Logo placement around and throughout the facility and hand-out materials Facility signage

Finding and Acquiring Sponsors Understanding one’s own sport organization is critical to then be able to establish the best sponsorship fit. Then it is possible to identify companies that match in the way that the property can positively impact their business model. “Who values your market?”

Is a Sponsoring Organization a Good Partner? A sport organization may want to uncover this intention for several reasons. First, plans for solid marketing practices can indicate to the sport organization that this company may be a good business partner. Second, it is highly desirable for the sport organization to be the recipient of additional advertising for its own purposes. Third, a property should uncover sponsor intent to properly invest in a healthy business relationship that has a better chance at longevity. – This concept is key to the most successful sport to sponsor relationships. Longer relationships allow for time to build the connection between sponsor and property in the mind of the fans.

Determining Objectives of Sponsorship There are two main categories under which an array of objectives can be housed: direct and indirect. Direct objectives are intended to drive immediate sales. – These objectives may provide an opportunity to quantify revenues. Indirect objectives are the larger group of ways to utilize sport sponsorship to achieve desired results; including influencing brand awareness, brand attitudes, and brand image. – Objectives of this nature will take time to execute and can be difficult to establish clear returns with standard measurement tools.

Relationship Marketing The concept of uniquely multi-faceted relationships helps to encompass the ultimate uniqueness behind this particular style of business arrangement. Relationships in sport are multidimensional in ways other businesses or advertising alone simply cannot reproduce. Sponsor to fans, property to fans, property to sponsor’s consumers and fans to fans are more relational aspects present at every sporting event. Finding out how to truly deepen these many relationships should be at the center of a sport marketer’s focus.

Evaluation There are many reasons companies choose sport sponsorship as a marketing strategy. Ultimately, most sponsoring companies would like to see a positive impact in sales. Return on investment (ROI) may be more obtainable with direct objectives. Direct objectives do not contain many variables and are thus fairly easy to assess. Return on objectives (ROO) involves driving traffic to stores and websites and media measurements for a better overall understanding of effectiveness.

Activation Activation is the portion of the sponsorship that engages with the fan, ideally with some sort of close interaction that enhances the fans’ experience. What a sponsor does with and at the sport event or facility is vital to the entire relationship. A valid question to ask would be “Who sets the objectives and implements the plans of action?” The answer is not so simple.

Activation (cont.) The sponsors must know their own objectives and what they want from the property. It is sport event managers’ responsibility to lead the way with helping the corporate sponsors in doing just this. It is not enough to just provide a list of inventory but to help them understand the how and why for activation. When making recommendations for successful activation, the sport property should pay careful attention to involvement of the sponsor organization on-site as well as the types of activities offered.

The Agreement After a sponsor and a property have determined they will be a good fit, the documentation and literal agreement must be created. These will vary largely across the national to recreation and leisure levels. There are certain areas that should be included at each level. – Determine and define the length of contract, which must be clear, for example January 1 to December 31. – Benefits to the sponsor should be outlined. This may be challenging and focus mainly on the inventory being purchased, such as signage placement and media inclusion.

The Agreement (cont.) Payment obligations of the sponsor: The agreed upon price along with how to provide payment and repercussions for late payments. Type of capital exchanged should be considered and outlined as well, monetary and/or in-kind. Contingency plans resulting in the partnership not taking place, termination, or an event not taking place. There are two main categories for this. – Indemnification: Noting legal action can occur when a party is at fault, resulting in possible financial losses. – Force Majeure: Termination of agreement upon even cancellation when neither party is considered at fault due to causes beyond either party’s control.