Who Makes Connections in Sports Team Sponsorships?

The world of sports team sponsorships is growing ever more complex.  In the old business model, going back 30 and 40 years, companies simply bought advertising time on television and radio stations that broadcast games and sent one message through one or two distribution channels in order to align their company and product with the team, or the sport, and its' customers.  Today, there are more and more opportunities for companies to reach potential customers, because there are more products available with which to associate through sports team sponsorships, and more opportunities to be able to reach to targeted audiences.  This offers companies the chance to be more efficient in their sponsorships, but it becomes increasingly difficult and labor-intensive for the companies and the teams to negotiate this new minefield themselves.

So with more and more frequency, both sides of these types of transactions are reaching out to middlemen for assistance.  From the team side, this is in part because they are working hard to create new revenue streams through products, merchandise, ticket sales, new media rights and more.  As an example, the NBA is in the process of becoming the first major American Professional sports league to allow jersey sponsorships (following in the path of MLS Soccer teams and European leagues of all sports).  The teams and the league have yet to figure out who controls the inventory, the potential value of the sponsorships or what kinds of companies and products would be interested in the sponsorships (Lombardo and Lefton, 2012).  This kind of uncertainty causes confusion, even though it is borne of opportunity.

Similarly, companies that wish to advertise through sports also have difficulty understanding all of the possibilities that are now available for them within sports team sponsorships, even as the technology to track the data can give them complete analytics about fan behavior and how fans interact with various parts of the sports viewing experience both in stadiums and at home.  Companies that are big spenders in title sponsorships, traditional and digital media strategy and more, such as Met Life for example, as well as smaller spenders like AAA Automobile Club that are slightly more selective about which properties they sponsor, all have vested interest in working these sponsorships efficiently, where they can get the best value for their money by targeting their audiences in areas and through products where they know those audiences are going to congregate (Ourand, 2012).

With more and more options available, and with more and more data available, the technology and opportunity is there to decrease the waste in the system, and to make all sides increase their winning percentages in these kinds of deals.  So it is little surprise that there is a business opportunity for agencies that can align companies not only with properties but also individual strategies within properties that can deliver business to them.  These agencies may be small, relatively new companies that employ no more than a dozen people and concentrate on a handful of clients on each side.  They may be design firms which have now incorporated their own brand activation departments, because stadium activation has become such an important revenue stream that it needs to be built into the design process.  Or they may be established marketing and media agencies that have simply recognized the opportunity and increased resources in this area.

Though a handful of metaphorical predators have entered this ocean, it is still very much a blue ocean because so much of it is unexplored and undiscovered.  In the next few years, those who follow sports business and sports team sponsorships are going to hear a lot from the big fish who spout their triumphs, but they should know there will be plenty of other fish under the surface getting fat on all the opportunities that exist.

Other References

Lombardo, J. & Lefton, T. (2012, September 24). NBA clubs hire firms to help sell patches. Sports Business Journal, DOI: sportsbusinessdaily.com

Ourand, J. (2012, May 28). What's worked. Sports Business Journal, DOI: sportsbusinessdaily.com

Photos:
1. From Sportsnetworker.com
2. From Freshnessmag.com