As winter approaches, most big tournaments are behind us. In previous blog posts we discussed sports marketing more in-depth. Next up in this series, we’re gonna take a closer look at the different types of sponsorships in sports.
Brands pay large amounts of money to athletes, teams, or events to get more visibility and ultimately increase sales. They do this through sponsorships. Sponsorship occurs when an outside body (be it a person or organisation) offers financial support for a sport (whether this is an event, organisation or athlete) resulting in the mutual benefit of both parties. Sponsorship can be financial or in-kind payments.Get support with sponsorship - or sports marketing
Four types of sponsorships in sports
Sponsorships occur at all levels of sport, from individuals to teams and leagues. However, not only the big leagues or most televised sports such as the Tour de France, Champions League, or F1 or Olympics receive sponsorships.
For instance, school teams may have a sponsored kit, or promising students may obtain scholarships (a phenomenon known in the US) while elite athletes may earn big bucks to wear certain sportswear or use branded equipment. Logically, the amounts of money paid and media coverage are correlated. Now, let’s have a look at the four types of sponsorships in sports and give some examples of the commitments both parties take.
Four types of sponsorships in sports
Performers might display a logo, wear a particular brand or endorse products. Brands on the other hand pay for training, competition, and travel costs.
A team or club wear a kit, display banners, or carry a company name for the team or venue. The sponsor keeps his end of the deal by paying the competition and travel costs.
In this case, organisations can rename competitions, cups, and leagues, while sponsors brand their development programmes, or improve facilities.
Brands fund the running of the event, provide free products to participants and the organisers allow the use of their logo on products.
Benefits of sponsorships
Benefits for the sponsor
It goes without saying that there are many benefits to the sponsor or brand. From a marketing perspective, sponsoring an athlete or club can have multiple advantages:
- Raises awareness of their company or brand.
- Advertises products and services.
- Promotes a positive and healthy image of their company by linking it with a popular activity, even if the product is not particularly healthy.
- Provides rewards or incentives for staff and customers.
- Increases sales or revenue through increased media exposure.
- Interesting investment on fiscal level.
Benefits for the athlete, team, sport or event
As per the definition, sponsorship has mutual benefits for both parties. On the other end of the deal are the athletes, teams, events.
- Individuals – covers costs such as kit, equipment, travel, accommodation, competition fees, time to train.
- Teams and clubs – subsidises kit, equipment, grounds or clubhouse maintenance.
- Sports – pays for coaching and coach development, beginner programmes, talent development.
- Events – covers venue hire, catering, hospitality, publicity, programmes, officials’ costs.
Athletes with large social media followings, often receive influencer deals from their sponsors, additional to their sport sponsorships. This is a different type of marketing, but has the same principal: quid pro quo. The athlete receives payment (money or products) for giving exposure to the brand via their own social media. A win-win for both parties.
Disadvantages of sponsorships
Disadvantages for the sponsor
Unfortunately, some disadvantages may occur as well. As a brand, sponsorship may sometimes be an uncertain investment as sporting success is not always guaranteed. For instance, an athlete can become injured, a team can have bad luck and lose several games, etc. Moreover, if the event is disrupted, brands lose exposure and advertising potential. Think of the Belgian GP in August that was cancelled due to heavy rain.
Also, if the sport or performers cause bad publicity, this reflects badly on the sponsor. For example, the doping scandal of Lance Armstrong, the extramarital affairs of Tiger Woods, the domestic violence and convictions of Floyd Mayweather, just to name a few PR nightmares.
Disadvantages for the athlete, team, sport or event
Finally, for the athlete, the risks and disadvantages can be high too (on a personal level):
- Sponsors can limited or easily withdraw the sponsorship – no security.
- A performer can become reliant on a particular sponsor, which could then pull out.
- Some sponsorship (e.g., alcohol, fast food, …) can give a bad image to sport.
- Generous sponsorship is only available to the elite few.
- Performers, teams and events can be manipulated or exploited to suit the sponsor.
- Difficulty of minority sports or those with little media coverage to attract sponsorship.
Key takeaways and after-thoughts
The bottom line is the benefits still outweigh the disadvantages, as the visibility and awareness created through media coverage (TV, radio, social media) is so high. And there is no such thing as bad publicity (or is there?).
To conclude, sponsorships in sports can be an excellent marketing tool, as it can create immense visibility and top-of-mind awareness. Think of Formula 1 driver Max Verstappen and Red Bull, the Jupiler Pro League in Belgian soccer, or the Jumbo-Visma cycling team. We cannot think of one, without thinking of the other.
About the author
Pieter-Jan is a trilingual T-shaped Marketer and a dynamic, enthusiastic digital native with a creative, strategic, and analytical approach to marketing. Currently he is working as a Marketing Consultant at 4P square, a leading sales & marketing consulting company.
Want to know more about Pieter-Jan? Feel free to start a conversation with him on LinkedIn.