brands & marketing

The
Sports
Sponsorship
Market
Looking back over 2008 and 2009 it is clear that sponsorship is suffering along with rest of the world
economy, with dire predictions being made in the press every time a sponsorship comes to an (often
natural) end. However, behind the headlines the real picture is more complex.

Formula One driver, Mark Webber - Getty Images

34
35
brands & marketing
One of the most useful indicators of the state of
play in sports sponsorship is The World Sponsorship
Monitor (TWSM), produced by IFM Sports Marketing
Surveys. It analyses sponsorship deals reported in
the international media drawing on a large sample
to provide an insight into brand behaviours. TWSM
is not focused only on ‘mega deals’: any sponsorship
contract with a value of $75,000 or more is included
making it possible to drill down and explore current
trends among small to mid-sized brands too.
The total number of sponsorships reported in 2008
was 1,333 against 1,196 in 2007 indicating sponsorship
was not too badly affected by the credit crunch, which
really tightened its grip in late summer last year.
Going into 2009, results from TWSM suggest that
there was no significant decline in the volume of
new sponsorships being reported. In the first quarter
of 2009, compared to the same period the previous
year, slightly fewer new deals were signed overall
(300 compared to 302). However, the number of
withdrawals by brands from sponsorship increased
(42 this year compared to 24 last year) and it remains
to be seen how renewals will be affected across the
full 12 months. Given that many deals are signed over
three or more years, it is likely that many will run
unaffected through the economic downturn.
William Fenton, editor of TWSM, points out that
“in 2008 the proportion of higher value sponsorships
(valued at over $10 million) over the total sample was
actually higher (19 per cent in 2008 compared to 13
per cent in 2007). This is because brands are seeking
out partnerships with the mega events, such as the
Olympics, American football’s NFL, Formula One and
major football brands, which draw huge television
audiences. This was borne out in 2008 by the number
of sponsorships announced for the Beijing Olympics
as well as the London Games in 2012.”
However, in early 2009, TWSM was predicting an
increase in lower-value deals of a shorter duration and,
as suggested by anecdotal evidence, the properties in
between the premium events and the more common
lower-value properties will be squeezed hard.
In terms of sponsoring industries, cars, banks and
retailers are amongst the most exposed sectors in
the current turndown and it is perhaps unsurprising
that it is expected there will be some reduction of
sponsorship activity by these sectors over 2009.
The 1,333 deals which are included in TWSM’s
2008 Annual Review illustrate trends in sponsorship
type, region, values and sponsoring industries. This
year’s review showed that sport continued to dominate
the global sponsorship market accounting for 79
per cent of all sponsorship deals and 88 per cent of
total value
Naming rights deals are relatively rare – accounting
for just four per cent of all sponsorship deals signed
– but they attract proportionally higher rights fees. In
2008, seven per cent of total committed investment
went into naming rights. Naming rights boomed in
2006 and 2007 with notable deals such as Barclays’
record breaking $400 million naming deal for the
new arena of the NBA basketball team New Jersey
Nets. The biggest naming rights deal in terms of
total investment, was signed by the Consol Energy

Top 20 Sponsorship Deals by Reported Value in 2008

Rank Sponsor Sponsorship Value ($m) Duration (Years)

1 Nike French Football Federation (from 2011) 475 7
2 Nike Internazionale 206 10
3 BT London Olympics 2012 Tier One sponsor 160 5
4 Nortel London Olympics 2012 Tier One sponsor 150 4
5 Adidas AC Milan 123 10
6 Nike Roger Federer 118
7 Adidas Ajax 110 10
8 Adidas Russian Football Union 100
9 BP London Olympics 2012 Tier One sponsor 100 4
10 British Airways London Olympics 2012 Tier One sponsor 98 5
11 Adidas All Blacks 90 10

36
company, which committed $84 million over 21 years
to be the naming rights sponsor of the stadium of
NHL ice hockey team the Pittsburgh Penguins (the
12th-biggest of all sponsorship deals signed in 2008).
In terms of annual committed fee, the two biggest
venue deals are those signed by drinks company
Anheuser-Busch and financial services firm MetLife
for the new Meadowlands Stadium – the new home
of the NFL teams the New York Jets and New York
Giants. Under their deals, the two companies will pay
a reported $8 million per year each over five years.
Outside the US, the biggest naming rights deal
was in Germany where Mercedes named Bundesliga
club Stuttgart’s 55,000 seat stadium the Mercedes-
Benz Arena, in a deal worth $31 million over 30 years.
Also in Germany the Signal Iduna Group signed an
early five-year extension to its contract with Borussia
Dortmund to retain its sponsorship of the ‘Signal
Iduna Park’, Germany’s biggest football stadium.
For the fourth year in succession, the automotive
industry is the most prolific spender in sports
sponsorship, signing 143 deals in 2008, up from 125
in 2007. The banking sector was next with 110 deals,
down from 127. Sports clothing remains a major
sponsoring industry: it is the third biggest, signing 97
deals in 2008 compared to 68 the previous year. Six
of the top 10 most valuable deals in 2008 were signed
by clothing and kit makers. The two biggest deals
of 2008 were signed by Nike. The first was with the
French Football Federation starting in 2011, covering
seven years and worth $474.6 million. The second
was with Italian Serie A club, Inter Milan, worth $206
million over 10 years.
Telecommunications continues to be important
as fifth-biggest industry in terms of number of deals
signed (72 in 2008 compared to 53 in 2007. BT, Nortel
and Deutsche Telekom were the third, fourth and
10th biggest spending sponsors. For the first time the
travel industry is in the top 10 sponsoring industries,
following a number of deals between sports clubs and
travel destinations or tourist boards. In total, there
were 37 deals signed by the travel sector in 2008, up
from 13 the previous year. The number of airlines
deals also increased to 59, from 46.
Unsurprisingly, the most sponsored sport is football
both in terms of the total number and the total value
of reported deals. In 2008, there were 262 football
sponsorship deals compared to 218 in the previous
year. Five of the top 10 deals signed in 2008 were for
football, together totalling over $1 billion alone. Tennis
became a hotter property for sponsors, moving into
the top 10 in terms of number of deals signed. The
sixth biggest deal of 2008 was Nike’s $118 million
sponsorship agreement with Swiss tennis superstar
Roger Federer. Motorsport fell out of the top 10 most
sponsored sports in 2008. Formula One experienced
fewer major headline deals in 2007, though notable
exceptions were the Olympus $30 million deal with
the McLaren team and Reebok’s $20 million deal with
2008 Formula One Champion Lewis Hamilton.
The World Sponsorship Monitor is a searchable
subscription archive giving rights-holders, brands
and agencies the opportunity to benchmark deals
and values worldwide. It is available through
SportBusiness by contacting Adam.Barker@
sportbusiness.com +44 207 954 3481

Rank Sponsor Sponsorship Value ($m) Duration (Years)

12 Consol Energy Pittsburgh Penguins NHL stadium 84 21
13 Dekra Deutscher Fußball-Bund (DFB) 80 4
14 Deutsche Telekom Deutscher Fußball-Bund (DFB) 80 4
15 Miller Dallas Cowboys 80 10
16 Rogers Buffalo Bills 77 5
Communications
17 Automobile Club Auto Club Speedway of Southern California 75 10
of South Carolina
18 Banco Itau Brazilian Football Confederation 75 5
19 Budweiser NHL sponsorship through Bud Lite 75 3
20 Olympus US Open & US Open Series Offical Camera 70 6

37