Tiger Woods earns $29 million a year from Nike just by wearing their clothing, and yes, other players may earn less, but the amounts involved are still pretty substantial. Even a novice pro golfer can earn $75,000 a year just by wearing a sponsor’s cap. Who is going to turn down that offer?
LeBron James had sponsorship deals in 2020 that earned him $64 million (more than double his $31.4 million salary)
Endorsement and sponsorship deals are worth a fortune to top athletes in all sports. But player deals are only a small part of the picture. Statista estimates total sports sponsorship in North America will be over $20 billion in 2022. This includes title sponsorships, on-pitch ads, and sponsor-named grounds as well as player endorsement deals.
Which Companies Sponsor Sport?
You can see an obvious case for sportswear and equipment companies spending millions on sports sponsorship, but many companies outside the sports niche also spend big in this area.
Forex trading companies, waste management providers, and banks all spend heavily on marketing through sports. What’s the logic behind a forex or waste management company spending millions on baseball, football, or golf sponsorship? They do it for the brand mentions and exposure in the media. They also want to associate their brand with success and to build relationships with fans.
All brands want to be linked with sports in fans’ minds, but brand benefits have to work both ways because brand associations can be harmful as well as beneficial. The PGA of America moved the 2022 PGA Championship from Trump Bedminster because they saw the Trump brand as damaging to their image and mission.
Does Sponsorship Pay?
Sponsorship pays when:
- Someone buys your branded shirt because a sports star they admire wears the same brand
- Your brand is associated with fans’ favored teams
- Every time a TV camera displays your name or logo
- Your brand is linked to the feel-good factor that comes with watching sport
- Every time a TV anchor mentions your brand in association with a sporting event
Sports sponsorship involves large outlays, but every dollar you spend is an investment that repays heavily.
How Are Things Changing in 2021?
The graph screenshot below courtesy of BrandenResearch.com shows how much the 2020 Covid restrictions reduced sports sponsorship spending.
Spending in 2020 was down because many events were canceled because of Covid-19 restrictions on large gatherings. Spending is expected to return to the previous growth curve in 2021.
In 2021 more events are happening behind closed doors rather than being canceled. Ticket receipts are down, but sponsorship is hardly affected because fans still watch, but from home.
The appetite for TV and online viewing is undiminished, allowing sponsoring brands to continue to enhance their relationships with sports fans. Watching via apps and TV-on-demand is becoming more important than live broadcasts.
Sports Sponsorship in a Recession
Many companies cut their marketing budget during a recession. That’s a mistake.
People watch more TV and sport on mobile apps when they are at home, like now. Buying decisions happen when the product makes people feel good. People love sports. When someone sees your brand when they are watching sport, the love they feel passes to your company.
Company relationships with customers are built slowly over many years. Sponsorship is a long game that needs to happen in tough times as well as good times.
With short-term thinking Company A passes up a sports sponsorship opportunity so Company B jumps in and soon replaces the original sponsor in fans’ hearts.