Driving Sport Sponsorships: Safely Navigating The Complexity & Unlocking Real Value

Driving Sport Sponsorships: Safely Navigating The Complexity & Unlocking Real Value

In this guest post, Chris Haigh (pictured below), CEO of sports social content agency 20FOUR, offers his tips for brands wanting to navigate the prickly space of sports sponsorships…

It’s fair to say Australia is a nation devoted to sport. We are a country bursting with sporting codes, spanning from the nation’s favourites AFL and NRL right through to those in the action and Olympic categories. As a result of this remarkable affection we arguably have some of the world’s most engaged fans and the value of sport in Australia will always be compelling.

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Globally the sports sponsorship market is worth approximately US$62 billion a year with the Australian value sitting at around US$734 million, suggesting sponsorship levels remain significant and stand strong against other developed nations. Yet, there lingers a tangible fear and scepticism towards engaging in sponsorship deals, with the idea often ending up in the ‘too hard’ basket.

The initial reluctance often comes from unjustified fear around ‘protected’ sponsorships and the myth of ‘exclusivity’ that is all too-often associated with these. The reality is that in each sporting code there is only a very small number of protected categories, and within those there are again only very few official partners that have the ability to gain a fully ‘exclusive’ position in that code.

There are often strict requirements around a minimum commitment that earns exclusivity, however in many cases this will not rule out involvement from other brands at a club or athlete level. This is why it’s so important to take a multi-dimensional approach to sports sponsorship. There are deals to be made at athlete, club, code, association, league and event levels. Each of these tiers offer different levels of sponsorship and are suited for different types of businesses and scales of investment. Depending on the level of the athlete there will often be a couple of black spots (from their code or team), however this is significantly outnumbered by the huge volume of opportunities to work with a particular brand or organisation.

What we are also seeing more frequently is individual athletes getting serious about their right to engage in unique deals and seeing past the assumed constraints on these caused by deals made at the governing board level. Star fast bowler Mitchell Starc recently became the first player to align with a rival to one of Cricket Australia’s protected sponsors. Starc joined a partnership with Audi Centre Parramatta despite Toyota being a principal sponsor of Cricket Australia. This also highlights the breadth of opportunities available for smaller businesses when it comes to sports sponsorship that they often haven’t considered for fear of facing protected sponsorship clauses from much larger brands.

Whilst discussing this topic we must remember the core reason why sports sponsorships work; there is gain to be had for both parties. This age-old mutually beneficial arrangement has led to a booming industry that shows no signs of diminishing, but rather adapting. Recently we have seen big name sponsors retract from major events. For example, Emirates has just announced it is ending its decade-long partnership with the Australian Open as “brand recognition in Australia is now very high so sponsorships are no longer necessary”. This is an example of a brand not adapting to the new rules of sports sponsorship.

No longer is the role of sponsorship to simply drive brand awareness, the emphasis lies on increasing consumer engagement. Marketers need to be smart and seek to include promotions, events and activations in their deals such as KFC’s cricket sponsorship. This has seen KFC create revenue from unique cricket-themed products, whilst driving customer engagement with campaigns such as the ‘Bucket Head Army’. If anything, this simply leaves the sports sponsorship field more fertile with opportunity for those who are invested enough to engage with the deal in a smart and strategic way.

In a recent article, former AFL player Matthew Pavlich wrote of the difficulties of navigating “a modern sporting deal” where he claims it is “easy to overlook the delicate balancing of the interests of rights holders, leagues, clubs and individual players”. I am inclined to disagree. It is always very clear, and those who have done their research will know exactly who has protection in each particular space. At the end of the day, whilst it can seem a daunting challenge, navigating the sports sponsorship space does not need to be stressful, as long as you take a strategic approach. For those wishing to navigate a sports sponsorship deal, here are my top tips:

1.     Have a game plan – Don’t just go with the biggest or best your budget can afford you. First decide what your brand stands for and means, then identify the team/individual/tournament that best reflects those qualities.

2.     Do your homework – There is a host of data available as to the size of an audience, the passion of the followers, engagement levels, demographic skews, all of which points to an ultimate ROI for your brand.

3.     Keep your finger on the pulse – Once the deal is signed don’t sit back and relax. Keep monitoring public perception throughout sponsorship and stay disciplined in leveraging the assets you’ve acquired. These data insights are often the most valuable part of the sponsorship offering.

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