Sponsorships form a major chunk of revenue for sports clubs and teams. Today, Sports Sponsorship is more than just a brand paying a sports team money to display their logo on the team clothing.
In this blog we talk about what is sports sponsorship, career in sports sponsorship, skills and education required and a how sponsorship benefits both the parties.
If you aspire to make a career in sports sponsorship, do read the full piece, shall help.
Overview – What is Sports Sponsorship
Sports sponsorship in simpler words is a commercial agreement between two parties where the sponsor (which could be any company) provides finance to the sponsee (sports team/tournament/athlete) to obtain a certain set of rights which are used by the sponsor to create more brand awareness, visibility and customer loyalty creating positive PR.
Sport entities have their own brand value, attracting a huge number of spectators and interested parties both offline and online, brands see potential consumers in this huge number, which is what makes sports sponsorship a very important crust of how sporting entities generate revenue and how companies can maximize their profits.
Types of Team and League Sponsors:
- Title Sponsor: The title sponsor is the most important sponsor and contributes with the highest amount in the total sponsorship revenue.
- Associate Sponsor: An associate sponsor also contributes a huge chunk of the sponsorship revenue next only to the title sponsor, and possesses exclusive media coverage and licensing rights.
- Official Sponsor: Official sponsors fill out the category roles for example, ‘official beverage sponsor’ for much lower costs as compared to the associate and title sponsors.
Sports sponsorships range from international events to regional and local events, thus becoming an accessible opportunity for aspiring professionals. Brands and events have to align with each other’s strategic objectives to create beneficial associations, with different entities of different sports, the strategic objectives change.
Individuals who understand these changes and know where to fit the right piece are sought after by organisations to carry out their sponsorship roles.
A basic bachelor’s degree in management, business administration or marketing will do for one in sports sponsorships at the lowest. Companies usually expect their employees to pursue an MBA (with or without a specialisation in Sports Management) or a Master’s degree in relevant subjects at some point in their career.
The competition is vast for those relying on a bachelor’s degree alone.
Scope of Work
Sports sponsorship is not one department alone. It is an overall sales and marketing process of business development. The scope of work here is quite varied. But going very specifically into the job of a sponsorship manager, you could be working in different types of organizations which don’t have to belong to the same industry.
You could be working for a specific sports marketing agency or a proper sports media outlet. However, you could also have a job at a sponsor company which could literally be any brand or corporation like Reliance Jio or even Lenskart for that sort. Basically, all types of companies that have access to be involved with sport could host your office.
Although the work experience in each sector may differ a bit and hence it gives a different shape to your profile. Most beginner-level sponsorship jobs are available at marketing agencies which are also where you start climbing the ladder.
Responsibilities include a plethora of maintaining relationships. Be it with the clients, B2B, rights holders, or even the colleagues, that alone involves a lot of work.
A sports sponsorship manager also has to work for the marketing of the relationships to companies and target groups of all sorts.
Other things include planning and executing events, preparing reports, liaising with various entities, basically whatever a sponsorship deal asks.
A role in sponsorship caters to most aspects of business development including sales, marketing and customer relationship management. Some of the important skills include
- Conversation Skills – Yes that might not be a certified skill but you do understand what we are trying to say. Conversations and negotiations bring deals home and are the main constituents of a make or break story. Really important to make the other side understand exactly what you think. Not really asking you to be Harvey Specter though.
- Negotiations: To negotiate is part of a conversation, a very important part when it comes to sponsorships. A good negotiation may give you a better term, better deliverables and a better deal overall. It is very important to get a win-win situation for both the sides though, by saying one may convert a better deal, we don’t refer to deals from the Black Friday sale.
- Writing Skills – This one’s needed in and out 24×7 of your work life once you’re into sponsorships. You need to make those presentations, letters, marketing ideas, sales pitches look good on their own.
- Multi-tasking – As explained above in Scope of Work, you could be up with a lot of things going on simultaneously and unfortunately, none of them can be compromised on.
Although you automatically develop all those skills as you work and gain some experience, it’s important to be in sync with other things like creativity, ideation, confidence to sell etc. Other basic technical skills will always come handy.
Based on a research on jobs related to sponsorship in India, the average annual CTC revolves around INR 5,00,000 for professionals with an average work experience of two years.
How Sports Sponsorship Benefits Brands
We know how brands love to expand sales with the use of marketing, be it advertisements, exhibitions or promotional initiatives to attract target groups. It is the right platform to execute these activities that brands are always on the lookout for.
Everyone wants more people to come to take a look at their products. Sponsoring a sportsperson or a sporting body gives them a platform to represent themselves to the consumers or fans of that sport. Let’s dive deeper with a real example to make this case more relatable in the Indian context.
Vivo, the chinese phone makers, entered the Indian market in December 2014, but the brand failed to make a significant impact on their sales in the country for a couple of years.
Vivo’s market share by 2016 was around 1% in India which was not up to the mark as a company would aspire in a market with huge potential.
Lucky for them, the then IPL sponsor Pepsi decided to pull out mid-way after the 2015 edition of the IPL owing to the spot-fixing scandal in 2013 and the termination of IPL franchises CSK and RR in 2015.
Before pulling out, Pepsi was in a deal that would pay INR 80 crore (approx. $11mn) to the BCCI every season till 2017. Vivo picked up the deal at INR 100 crore (approx. $13mn) for the next two editions i.e 2016 and 2017.
Ranveer Singh was roped in as the brand ambassador in 2016. Vivo came up with phones that would fit right in the mid-range category of Rs 8,000 and Rs 25,000 which could be termed affordable in a price-sensitive market.
As a result, Vivo owned approximately 15.49% of the market share of smartphones in India by the first half of 2017 (according to CyberMedia Research). Rival company Intex, who at the time had majority stakes in IPL team Gujarat Lions fell down from 11.96% to 6.14% in the market within the same span of time.
This surge in the market for Vivo made them sign the biggest deal in the history of IPL or cricket anywhere with a whopping INR 2199 crores (around $330 mn )for a period of 5 seasons from 2018 to 2022.
This very well explains the impact sports sponsorships can have on the business of brands. Of course, not all competitions will be as big as the IPL, but brands after identifying the sporting entity of the right scale for them can highly benefit from sponsorships.
How Sports Sponsorships Benefit Sports
In the case of brands it was only about benefits and the huge potential sports hold as medium to market. But in the case of sports, sponsorships are very critical for the functioning, forming a basic constituent of revenue generation for any sporting body or an individual.
EPL club Manchester United’s commercial revenue for the year 2020 was £279,044,000. Out of this £279,044,000 sponsorships alone accounted for £182,709,000 which is a huge 65.4% of the total commercial revenue.
It could almost be said that professional sports happen because of sponsorships, and that’s how important this part of the sports management umbrella is.
That was sports sponsorship for you.
Sports sponsorship is just one field among others in the sports industry. You can read up on various careers in sports management here.