Chinese telco Huawei shocked many on Monday when it announced it would be quitting its major sponsorship with the Canberra Raiders at the end of the year.
Huawei will finish up the decade-long partnership at the end of this year, despite the fact it signed a new deal last year running through until the end of 2021.
Huawei’s call to pull the pin on the sponsorship deal can ultimately be traced back to the 2018 Turnbull Government’s decision to ban Huawei from taking part in the construction of Australia’s 5G network.
“This is a direct result of the 5G ban and the negative business environment at the moment for Chinese companies in Australia,” Huawei Australia’s Jeremy Mitchell said.
“Unfortunately Huawei has been caught in the middle of a great trade war. The effect on our business is greater than we expected.”
Mitchell confirmed the 5G ban has significantly harmed the company’s Australian operations – which has been reduced from 1,000 staff to 100 in a few years.
And while there are numerous political forces at play in the Raiders/Huawei deal, the termination of the deal is indicative of a shifting attitude towards sports sponsorships.
Sports and entertainment agency MKTG recently surveyed 800 marketers from across 30 countries to gather a detailed understanding of the views and sentiment toward the sponsorship, sports and entertainment market.
While 90 per cent of respondents said sponsorships can help brands create a meaningful connection with customers, there is a shifting attitude in what these sponsorships should look like.
Exposure is no longer enough for brands to justify sponsorship deal – with brands now demanding authentic connections.
“A key trend from our study is the rapid shift in sentiment towards whether brands should pay for all their rights or just those that are used,” said MKTG’s national managing director Matt Connell.
“Pre-pandemic, there was an alignment between brands and right holders.
“Fast forward two months and 72 per cent of brands now say that fixed sponsorship may not be the only way forward. This may signal a shift in how rights and partnerships are constructed in the long run.”
And while sponsoring the Raiders gave Huawei exposure on the highest level – last year’s NRL Grand Final – its decision to exit the NRL shows that this is no longer enough.
