Sports Sponsorships Go Through the Roof
One of the ways that sports teams gain income is through corporate sponsorships. Companies pay top dollar to advertise and sponsor sports teams. There have been some huge deals that have taken place in many different sports over
the years. It is very interesting because a sports franchise and a company start a great relationship that can last for many years. It is beneficial for both the organisations involved in the deal and companies spend huge amounts of money in their sponsorship
deals.
There are several ways that sports teams can generate revenue to run their affairs. One is through the price of tickets that fans pay to attend games, the other is through corporate sponsorships and finally, they can be given donations
by wealthy sports lovers. Over the years, sports sponsorships have become increasingly the most sought after way to generate revenue for clubs. The benefit for corporations and companies is that it is a very visible source of advertising and brand recognition
for them. When they have their logos and brand names splashed all over a team and the team plays in front of 60,000 fans, that is a huge number of people looking at your brand. The benefit for sports clubs is that the money generated from sponsorships helps
to pay the wages of players and all other overheads the club may have.
Recently, the sponsors of Formula 1 have gotten together and made a consortium in order to create a sort of sponsor pressure group. The purpose of this pressure group will be to help convey the needs and desires of the various
sponsors who are usually not involved in decision making by the governing bodies of the sport. In the past, sponsors have not been a collective unit and have had to voice their concerns on an individual basis. The reason why this collection of sponsors has
banded together is because they feel that the governing body of Formula 1 is venturing into new territories to increase their revenue but these markets might not necessarily be markets that the sponsors are prevalent in.
Over the years, there have been some substantial deals made between sports clubs and companies. One of the biggest deals in football is between the Premier League club Manchester United and Nike; this deal is worth £302.9 million
over 13 years. This deal was struck in 2002 and saw Nike replace Umbro as the kit manufacturer for the team and now we can see Nike’s logo and brand name associated with everything Man U does. The deal involves Nike getting control of the club’s global licensing
deals and United will share half of the profits as long as the club stays in Europe and also stays in the top half of the League table.
Staying with football, there is a football club out there that believes in giving back to the less fortunate out there rather than simply earning more money. The European champions Barcelona have donated the front part of their
team’s shirts to UNICEF and the charity’s logo can be seen splashed across the chests of all their players. They even pay £1 million annually for the privilege. It is good to see that some clubs are using sponsorship deals to benefit others.
The increasing value of sports sponsorship is hitting new heights today; over £300 million is being spent on sponsorships in the United Kingdom alone. This is seeing numerous sports being sponsored from ice skating to lacrosse.
It is a very positive sign that money is being used to get people to participate in sports and revive sports that would otherwise not have any money to survive.
This trend looks all set to increase; more companies are seeing the huge potential in sponsoring big sports clubs all over the world. Even smaller clubs are benefitting from sponsorship deals and the whole industry is growing rapidly.
In the next few years, more records will be set in the deals that are agreed between companies and sports organisations.
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