This market update examines the sports sponsorship market in the UK. Sports sponsorship can be defined as a mutually beneficial transactional relationship between a sports organisation and a commercial partner, in which the former benefits financially and the latter from the communications opportunities that such partnerships offer, in terms of advertising and marketing. According to industry experts IEG, sponsorship therefore refers to the ‘cash and/or in-kind fee paid to a property (i.e. a sports, arts or entertainment organisation) in return for access to the exploitable commercial potential associated with that property. Although sponsorship deals can boost brand awareness by positively aligning commercial brands alongside inspirational sports organisations or personalities, sports sponsorship deals do not tend to focus on specific product advertising.
Title sponsorship is generally the most expensive and sought after type of sports sponsorship available. This form of sponsorship refers to deals where the name of the sponsor or commercial brand is positioned directly and exclusively alongside that of a sports competition, team or individual. Title sponsorship is often the most prestigious class of sports sponsorship and therefore tends to attract the most lucrative deals. Barclays Bank for example, has sponsored the Premier League since 2001 (although this sponsorship deal will end at the completion of the 2015/2016 season) while Rugby Union is headed by the Heineken Cup and English Test cricket is sponsored by South African investment bank Investec in a 10-year deal encompassing title rights which was signed in 2012. Title sponsorships have also been extended in recent years to include the corporate sponsorships of sports stadiums, and in particular football stadiums; for example, Manchester City FC’s deal with Etihad Airways which saw its home stadium reamed the Etihad Stadium and Arsenal FC’s agreement with Emirates Airlines, with the club’s stadium now known as the Emirates.
The potential benefits of sponsorship agreements for commercial organisations are considerable, with such deals providing brands with access to a vast live audience and, in some cases, coverage overseas. Sponsorship deals can also boost the public image of a brand by aligning it to the successes and positive attributes of the sponsored organisation or personality. In addition, sponsorship opportunities allow brands to engage with consumers across several channels, encompassing on-site sales offices, merchandise, TV/broadcast deals and/or title sponsorships.
Personal endorsement constitutes another form of sports sponsorship and refers to the sponsorship of an individual sports star or personality by a particular brand, named product or service. These types of sponsorship deal often encompass appearances by the sports personality on TV advertisements and other forms of advertising (e.g. billboards, direct mail, etc.) undertaken by the commercial partner. Often personal endorsement deals within sports are undertaken by sportswear brands and energy drinks, which are already aligned with the sports industry to some extent.
The market can be segmented according to type of sport being sponsored. However, it should be noted that these sectors can also include income generated by multi-event tournaments, such as the Olympics and Commonwealth Games. The main types of sports that attract sponsorship deals include the following:
- Football - including domestic tournaments such as the English Premier League and the FA Cup; and overseas events including the FIFA World Cup; the UEFA)Champions League; the UEFA Europa League; and the UEFA European Football Championship.
- Motorsports - including the Federation Internationale de l’Automobile (FIA) Formula 1 (F1) World Championship; as well as other motor racing competitions such as rally, stock car, superbikes and speedway events.
- Team sports (excluding football) - can include rugby, for example Rugby Union and Rugby League; and cricket, including County Cricket. Both sports also host their own World Cups and other international tournaments. Individual sports - sponsorship deals undertaken within this sector mainly encompass personal endorsements featuring an individual sports personality that participates in sports such as tennis or golf.
- Athletics - this sector encompasses multi-event games, such as the Olympics, Paralympics and Commonwealth Games, but can also include marathons and fun-runs.
- Horseracing - also includes other equestrian activities, such as sponsorship of racing events, jockeys, racing courses and, sometimes, venues.
Types of Sponsor
Although sponsors can include businesses from a broad range of industries, the following list provides details of the primary vertical sectors involved in sports sponsorship to a high degree in the UK:
- Gambling/lottery providers - includes online gambling companies such as Sky Bet, Bet 365 and Red32, as well as high-street betting shop chains such as William Hill, Ladbrokes and Paddy Power; and lottery providers (both national and regional). Automotive - this sector is heavily dominated by major automotive brands, such as Hyundai-Kia and the vehicle automotive manufacturer Continental who are both global sponsors of the Euro 2016 football championships. Nissan is also a sponsor of the UEFA Champions League. Vauxhall, also sponsors all four national football teams in the UK and General Motors Chevrolet, is a current sponsor of Manchester United FC.
- Financial services - includes banking organisations and other financial services firms. Visa is one of the leading financial sponsors, with the credit card firm sponsoring several global sporting events, including the World Cup and the Olympic Games. Other major sponsors in the UK market include Investec, Royal Bank of Scotland (RBS), Standard Life, HSBC, Santander, Natwest and Aviva, among many others.
- Sports goods - includes sportswear brands, namely Nike, Umbro and adidas. Nike sponsors several high-performing sports stars, including Maria Sharapova (tennis), Rory McIlroy (golf) and, Kobe Bryant (basketball). adidas is a FIFA sponsors a number of leading Premier League Clubs including Manchester United.
- Drinks brands - Coca-Cola heavily dominates sports sponsorship within this sector, with the soft drinks manufacturer continuing to remain a long-term official partner of the Olympic Games and FIFA World Cup. Other drink brands that have a strong presence within sports sponsorship include Pepsi, Carling, Heineken, Robinsons, Guinness, Lucozade, John Smith’s and Red Bull.
- Technology - includes IT, telecommunications and mobile network companies and brands. Leading consumer technology firm Sony is currently an official partner of FIFA while its PlayStation (PS) brand sponsors the UEFA Champions League and UEFA Super Cup. Other major global technology sponsors include Samsung which is an official sponsor of the Olympics.
- Utilities - including energy and fuel firms. BP and the France-based energy firm EDF are among the official partners of the British Paralympic Association (BPA) and Paralympics GB Team for Rio 2016 and BP is also an official partner of the TEAM GB athletics team. SHOW LESS READ MORE >
1. Introduction & Definition
- Report Coverage
- Market Sectors
- Types of Sponsor
2. Executive Summary
3. What’s Key in the Market?
- Key Drivers
- Market Trends
- The Cost of TV Broadcast Rights for Major Sports Continue to Rise
- Barclays Premier League Continues to Attract Record Sponsorship Revenues
- The World’s Highest Paid Athletes 2015
- The Importance of Social Media for Sports Sponsors
- Trends in Marketing Expenditure
- Economic Trends
- Market Position
- How Robust Is The Market?
4. Market Size, Segmentation & Forecasts
- Market Size & Segmentation
- The Total Market
- Market Sectors
- Types Of Sponsor
- Future Trends
- Future Economic Trends
- Forecast Total Market
- Market Growth
5. Strengths, Weaknesses, Opportunities & Threats
- Problems at FIFA
- Corruption at the IAAF
- Limited Financial Impact of England’s Early Exit from Rugby World Cup
- ‘Authorised Betting Partner’ of British Racing
- ‘Women In Sport’ Welcomes Publication of the Government’s New Strategy for Sport
- The Government’s Childhood Obesity Strategy
- IOC to Launch Own TV Channel in 2016
- App Aims to Help China Hit its Football Coaching Targets
- Sustainable Innovation in Sport
- Sponsorship Legislation
- Gambling Sponsorship Guidelines
- Ferrari Finds Way Around Tobacco Sponsorship Ban
7. Company Financials
8. Further Sources
- Government Publications
- Barclays Bank
- Coca Cola
- Emirates Airlines
- John Smith’s
- Paddy Power
- Red Bull
- Royal Bank of Scotland
- William Hill