Sponsorship – A Necessary Evil?
The purpose of this article is to identify some of the positives and negatives that can arise from sponsorship in sport, and invite your own views of this sometimes contentious topic.
Sponsors purchase the right to align their product(s) with sport through a variety of mediums such as events, venues, teams and individual sportsmen and women. With the ever-increasing commercialization of sport, many stakeholders (political, sporting, enthusiasts and bystanders) have analyzed the extent to which sponsorship has had an impact on the sport concerned, and whether that impact has been beneficial or detrimental.
The sponsor that has successfully acquired the rights to an event, venue, team or athlete should inevitably reap such benefits as enhanced brand awareness and increased sales (as appropriate). There will normally be a corporate hospitality entitlement. Team sponsors will usually benefit from the loyalty of that team’s supporters, who will be drawn towards a variety of merchandising opportunities. Sponsorship of athletes will normally involve the athlete promoting the product in some way, such as wearing the product if applicable, making personal appearances during which attention is drawn to the ‘brand’ or even being the new ‘face’ of the product (thereby providing invaluable endorsement).
The sums of money received by teams, venues and event organizers often means that ticket prices are indirectly subsidized, with the supporter/observer finding his/her ability to attend an event more affordable as a result. Some scholars have even suggested that there is a near-direct inverse correlation between the intensity of sponsorship in sport and ticket prices. An increase in the former can and does lead to a decrease in the latter.
Sponsorship can also help to ensure the financial well-being of both organizers and teams, many of whom might struggle to prosper with only ticket sales and own brand merchandise as their primary sources of income.
One concern is that sponsorship (and the commercialization of sport in general), and the vast sums of money that this brings, has meant that administrators of sport have not given due respect to its core values. Implicit in this is that the needs of loyal fans have sometimes been sidelined as secondary to the achievement of commercial objectives.
By way of illustration, consider ticket allocations given to the clubs participating in the UEFA Champions League (soccer) Final in 2007. This game was held at the Olympic Stadium in Athens, which has a capacity of 71,030. However, the two finalists were each given just 17,000 tickets, meaning that 37,030 tickets (52% of the stadium’s capacity) were given to sponsors of UEFA, or other recipients such as the Greek authorities.
With over half the stadium consisting of non-supporters, it is no surprise that issues have arisen subsequently. Many true supporters traveled without tickets, and forced their way into the stadium. As a result, people holding valid tickets were locked out due to capacity restrictions. It goes without saying that security at the event may have been seriously compromised with the potential for major crowd incidents.
For huge numbers of people, sport provides a lifeline, a passion, something to look forward to on a regular and frequent basis. It provides opportunities for socializing and being part of a community. The increasing part that sponsorship has to play in sport has, however, led to changes that have had differing impact for different stakeholder groups. On the one hand it is possible to praise the impact sponsorship has on sport – for example, many supporters are now able to afford ticket prices which are lower than they would otherwise be without the financial boost that sponsors provide to event organizers, venue owners and teams. On the other however, many fans are prevented from actively supporting their team because sponsors take a significant and substantial proportion of available tickets as a legitimate part of their sponsorship deal.
In this brief article I have only really touched the surface of what for many, is an increasingly worrying situation. Having considered the relationship between sponsorship and ticket prices it would seem we might unfortunately be in an ever-increasing ‘catch-22’ situation.
Does anyone have a solution?
I hope you all had a great Christmas, and have a happy new year. JAT