5.03 Discuss the use and importance of Sponsorships and Endorsements

SPONSOR: A business, person, organization, that finances a sports or entertainment entity Financing can be in the form of money, products, equipment, services, or any combination of the four

SPONSORSHIP Financing of a sports or entertainment entity (athlete, team, concert, or event) by a business in return for recognition affiliation

Reasons for Sponsoring SEM Events Increase sales and profits through affiliation Increase market share for existing products and services Introduce new products or services Increase brand awareness and company image

Reasons for Sponsoring SEM Events Enter and reach new target markets Build and maintain relationships with customers Build and maintain goodwill within the community

Reasons for Sponsoring SEM Events Entertain clients, employees, or potential customers Entertain existing customers, potential customers, or employees and their families

Types of Sponsorships Barter Sponsorships –company doesn’t pay for the sponsorship solely with monetary compensation Also referred to as “in-kind” Example – Sponsoring a little league team; company pays for equipment and uniforms in return for their name/logo on the team’s uniforms

Types of Sponsorships Endorsements – also called testimonials are personal recommendations regarding the use or quality of a good or service Consumers are more likely to purchase a good or service if a celebrity endorses it For example, Dennis Franz using Nextel phones in commercial

Types of Sponsorships Naming rights – contractual agreements between a sponsor and a venue or event Company or organization will sponsor a sports or entertainment facility or event In return, company or organization’s logo will appear in affiliation with the facility or event

Types of Sponsorships Naming rights Examples include: Fed-Ex Orange Bowl in Miami Coca-Cola 600 at Lowes Motor Speedway

Personal Services Agreement Are contracts between a company and a celebrity for the endorsement of a good or service

Personal Services Agreement – Obligations May Include: Hours the celebrity has been contracted Does the celebrity have the right to refuse an engagement? How far in advance must engagement be scheduled? Is there a minimum/maximum amount of time a celebrity must spend at any single event?

Personal Services Agreement – Obligations may Include: What type of travel and hotel accommodations will be provided? What affect does immoral conduct by the celebrity have on the agreement? Is the contract related to the overall achievement of the celebrity?