Do Exclusive Sponsors and Marketers of Sporting Events Get Value for Money?
Definitions of the word ‘exclusive’ include ‘sole’, ‘complete’, ‘undivided’, ‘full’, ‘inimitable’ and ‘absolute’. Inherent in the meaning of ‘exclusive sponsorship’ is an (official) association with a sporting event, by an organization, at the exclusion of other organizations.
Organizations that wish to obtain such affiliation with sporting events generally have to pay a lot of money for the privilege. The more prestigious the event, the more the organization will have to pay. The rights will almost always go to the organization willing to part with the most amount of money. This sum is often very substantial.
Take this summer’s Euro 2008 soccer tournament in Austria and Switzerland. Six official partners, four official sponsors, four official national partners and 50 licensees paid UEFA €240 million in total for exclusive sponsorship and marketing rights. €240 MILLION.
To define organizations attached to a sporting event as ‘exclusive’ is ironic in the modern commercial world of sport. More and more outfits are taking advantage of the legal loopholes attached to ambush (also known as guerilla) marketing. If you market your brand cleverly, you can exploit the revenue potential associated with a sporting event without having to pay a penny to the event/venue owner. Others will have paid millions.
How is this done? I personally witnessed a fine example this past weekend in London. I went to watch a soccer match at Arsenal Football Club’s ‘Emirates’ Stadium. Emirates is an Arab airline that has paid Arsenal many millions of pounds to be their exclusive shirt sponsor, and for the right to call the club’s stadium (which hosts 60,000 fans every week) ‘Emirates Stadium’.
Walking to the stadium, however, one could not ignore the loud noise caused by a plane circling the stadium in the sky above. The plane was carrying an enormous ‘Quantas’ banner. Quantas is the national airline of Australia. It is also not a sponsor of Arsenal’s and has not paid the many millions that Emirates has for the right to be affiliated with the club. Yet it has been able to market its product to the same 60,000 fans approaching the stadium to watch the game.
Event owners will often be required to agree to help protect the official sponsors wherever they can. However, how can you stop a plane from flying where it has received permission to do so by air traffic controllers? The answer is you cannot. Moreover, it is very difficult to actually have ‘exclusive’ rights to an event where there are so many possible avenues of exploitation available to unofficial third parties. These parties may not be entitled to claim affiliation with an event in an official capacity, but they will nonetheless be able to exploit the revenue potential associated with the event.
Event owners can make the venue and its surroundings ‘clean’. In essence this involves stripping all such properties of any object that markets a product that is not officially associated with the event. Furthermore there are examples showing that official association is more beneficial than unofficial association. One illustration can be seen in the increase in UEFA’s sponsorship revenue of €150 million at Euro 2004 to €240 million at Euro 2008.
However, with organizations continuing to find ways in which to market their products unofficially, together with the ever-increasing cost of attaining a contract of official association, are we heading to a situation where those entities with official affiliation stop coming back for more? Should official sponsors continue to bear the increasing cost of official affiliation when others benefit from the same event without paying for the right to do so?