Can too many Sponsors Dilute a Rights-Holder’s Brand? 22nd August, 2013

In sports leagues around the world, success on the field is ultimately driven by commercial revenue. As a consequence, their response has been to bring in sponsors to help facilitate the gap in funding. But this growing emphasis upon sponsorship has left many people asking – are too many sponsors diluting the right-holder’s brand?

Sponsors make the brand more vibrant

When discussing the ever increasing number of sponsors in sport, it would be hard not to mention Manchester United, having just signed another spread of partners across the globe. The club has recently signed the Indonesian tyre producer bringing the club’s sponsorship total to 33. It begs to ask the question – are these sponsors devaluing the Manchester United brand?

Jonathan Rigby CM for MU, has rejected that the club has anywhere near reached its limit. He states that by implementing a local model amongst the 77 countries they have sponsors in currently, they are appealing to each fan individually, making the brand more vibrant and producing a follow on effect which will ultimately benefit all sponsors involved.

This certainly seems to be the case when you look at their operating profit, which has increased this year by 13.7%. The club has also just signed a new shirt deal worth nearly £500 million over 8 years, increasing their commercial sponsorship revenue to £118 million annually.

More value lies in fewer partners

In comparison, Juventus believe going the other way is more rewarding. The club believes that having valuable relationships with fewer brands will bring you more credibility amongst your following, and as a result will lead to greater financial weight behind the deals. This is the case for Jeep who is currently their headline sponsor, and one of 15 corporate partners. In a public image driven market, and where it is only public interest which governs your reach; keeping it close to home can be seen as vital.

It’s the end product that matters

Brands enter into sponsorship for a multitude of reasons, but generally speaking, brands sponsor rights-holders for the audience, exposure, association and to fulfill their own brand objectives. For rights-holders, one of the main things they rely upon, aside from funding, is the fans/ their audience. As a platform, sponsorship allows both the rights-holder and brand to connect to their audience in a wholly tailored way.

The focus, therefore, shouldn’t be based on the amount of sponsors, but upon the end product – what the partnership has created for the fan, the overall experience and the club. MU’s model works because it has such a wide fan base and global sponsorship platform that allows them to associate with their following in all corners of the world. Juventus, on the other hand, has had success through its emphasis upon a few partners that have a strong affiliation to the club, keeping it close to home allows them to stay true to both the sponsor and the rights-holder’s objectives.

The Outcome

So long as the sponsorship is delivered and is aligned to the brand’s objectives and these objectives align with those of the rights-holder, the end product should ultimately benefit both club and sponsor. Dilution of the brand will come when parties lose sight of their overall objective.

EPL, Bendtner & Nalbandian: How Branding IS Still Relevant, No Matter What The Cost 2nd August, 2012

I wrote a blog a few months ago called ‘Sponsorship – More Than Just Branding’. Whilst it’s palpable that sponsorship has evolved into far more than straightforward logo placement, it’s important not to forget that branding – be it via naming rights, advertising hoardings or shirt sponsorships – is still relevant within our industry and most importantly, still deemed hugely valuable in the eyes of sponsors.

On Monday, General Motors signed a colossal £175 million deal with Manchester United that will see the Chevrolet logo replace Aon on the front of the club’s shirt for the next seven years. Chevrolet will be provided with numerous additional benefits from their shirt sponsorship (via advertising, hospitality etc.) but primarily their logo position on United’s shirts will promote brand perception of ‘success, speed and superiority’. Further it will automatically garner favour with United’s 659 million followers worldwide, as General Motor’s VP for N. America states: ‘this is about connecting the brand with Manchester United and its passionate supporters around the world.’

And it’s not just the Premier League’s most famous teams that are seeing such significant returns on shirt sponsorships, with the likes of Sunderland attracting substantial investment from their lucrative partnership with Invest in Africa. Recent figures reveal a 25% increase in English Premier League shirt sponsorship to £147 million, dampening fears that the EPL as a brand would suffer as the British economy entered its second dip in four years.

Now, while these shirt sponsorships represent the more expensive side of branding within sponsorship, a couple of incidents a month or so ago, illustrate that (clever/accidental) logo placement can still generate positive brand perception and awareness on a budget.

Firstly, David Nalb(r)andian took out a knee-height Nike hoarding, along with an umpires shin, after failing to return a base-line shot from Marin Cilic. This was followed shortly by the boxer-gate affair surrounding Nicklas Bendtner’s Paddy Power lined briefs, which he revealed after scoring his second goal in Denmark’s 3-2 defeat to Portugal.

Both men were disciplined accordingly – Nalbandian receiving disqualification from Queens and Bendtner receiving a hefty fine – and received their fair share of press attention. Granted the Nike hoarding board was not the focal point of such attention over Nalbandian’s kick-out, but it was in Bendtner’s case, and Paddy Power got a huge amount of publicity and engagement out of it.

Their Facebook page was awash with comments from users acclaiming their ‘genius’ marketing strategy and the story was covered byevery major broadsheet. While I don’t conform to the consensus that a distinctly average footballer wearing a green pair of briefsconstitutes exceptional intellectual aptitude, it was rather clever.

For just £80,000 (the price of Bendtner’s fine, which Paddy Power agreed to pay) the Irish bookmakers got nationwide exposure and saw thousands of additional online users flock to see what other mischief Paddy Power have been up to.

Obviously Bendtner’s boxers can’t be compared with Chevrolet’s United sponsorship in terms of worldwide reach, but you’d be hard pushed to say that it’s not better value!