Sports Sponsorship Market Report 2007
Key Note Publications Ltd, October 2007
Sports sponsorship is enjoying a purple patch in the UK, with spending on sponsorship deals rising by 5% to 6% a year in 2006 and 2007, a trend that contrasts with a far more negative period earlier in the decade. Even so, the full benefits of London's historic winning of the 2012 Olympics have yet to feed through into the market, and the UK market may also benefit if Glasgow wins its bid to host the 2014 Commonwealth Games.
The organisers of `London 2012' are hoping to earn £625m from sponsors to cover a third of the cost of hosting the Olympics, and this compares with a current spending value on sports sponsorships of £451m (for 2006, according to the sponsorship research agency Ipsos MORI). Although significant, this expenditure accounts for less than 3% of all spending on marketing communications in the UK.
Olympics sponsors, or `Partner' agreements, will temporarily shift the focus of the market away from the regularly targeted sports. More than one third of sponsorship money now goes on football, followed by motorsports (mainly Formula One). Other sports with significant market shares include Rugby Union, which enjoyed a high-profile World Cup in 2007, plus athletics, cricket and horse racing.
The main sources of Olympics sponsorships will, however, be familiar industry sectors, such as banking, energy and sports goods. Lloyds TSB and EDF Energy were the first `Tier One Partners' announced for London 2012, echoing current deals such as Barclays' title-sponsorship of the Premier League or npower's support for English Test cricket.
The precarious balance of risks and rewards in sports sponsorship was vividly illustrated in the closing months of 2007. England's rugby team battled through to a World Cup final, but in football all five British Isles teams were struggling to qualify for Euro 2008. Drug abuse continued to haunt athletics when a former Olympic champion sprinter, Marion Jones, admitted to having cheated in winning her medals. On a more positive note, Formula One attracted exceptional interest as Lewis Hamilton narrowly failed to win the drivers' award in his first season, although the Formula One championship as a whole was not without its controversies.
Away from the `glitzy' Premierships and global games, grass-roots sponsorship of sport at a local level is growing in importance, approved by the Government in its ambition to improve the fitness of the population. Major examples include Barclays Space for Sport campaign and funding of local football opportunities by Nationwide and McDonald's.
The combination of grass-roots and major event sponsorship should ensure strong growth for the market right up to London 2012 and, by then, England could also be preparing itself to host football's World Cup 2018. This would ensure further growth in the sport over the next decade.
Executive Summary
1. Market Definition
REPORT COVERAGE
Definitions
Exclusions
The London Olympics 2012
MARKET SECTORS
MARKET TRENDS
A Mid-Decade Recovery
Football More Dominant
Key Sports
Table 1: Examples of Current Major Sponsorships†, 2007
Grass-Roots Investment Increasing
Globalisation and Consolidation
Changes by Sport, Sponsoring Sector and Media Coverage
ECONOMIC TRENDS
Population
Table 2: UK Resident Population Estimates by Sex (000), Mid-Years 2002-2006
Gross Domestic Product
Table 3: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2002-2006
Inflation
Table 4: UK Rate of Inflation (%), 2002-2006
Unemployment
Table 5: Actual Number of Unemployed Persons in the UK (million), 2002-2006
Household Disposable Income
Table 6: UK Household Disposable Income per Capita (£), 2002-2006
MARKET POSITION
The UK
Overseas
2. Market Size
THE TOTAL MARKET
Table 7: The Total UK Sports Sponsorship Market by Value of Major New Deals (£m), 1994-2007
Figure 1: The Total UK Sports Sponsorship Market by Value of Major New Deals (£m), 1994-2007
NUMBER OF DEALS
Table 8: Number and Average Value of Major New Deals in UK Sports Sponsorship (number of deals, £m and £), 1994 and 1999-2006
BY MARKET SECTOR
Table 9: The Top Ten Sports Sponsored in the UK by Value (£m and %), 1994, 2000 and 2004-2006
Table 10: The Leading Recipients of Sportsmatch Support (number of awards, £m and £), 1993-2005 and 2005/2006
PROFILES OF LEADING SPONSORED SPORTS
Football
Motorsport
Rugby Union and Rugby League
Athletics, the Olympics and the Commonwealth Games
Cricket
Horse Racing
Golf
Tennis
Other Sports
3. Industry Background
Recent History
Number of Companies
Employment
Regional Variations in the Marketplace
How Robust is the Market?
Legislation
Key Trade Associations
European Sponsorship Association
4. Competitor Analysis
THE MARKETPLACE
SPONSORING COMPANIES BY INDUSTRY SECTOR
Table 11: The Origins of Sports Sponsors by Broad Industry Sector (number of deals and %), 2003-2006
Financial Services
Alcoholic Drinks
Sports Goods
Information and Communications Technology
Automotives
Other Sponsoring Sectors
INDIVIDUAL BRAND RECOGNITION
Table 12: Consumer Recognition of Brands as Sponsors of Sport (% of respondents), 2006
OUTSIDE SUPPLIERS TO THE INDUSTRY
Marketing Services Agencies/Consultants
The Media
MAIN MEDIA ADVERTISING
Table 13: Main Media Advertising Expenditure on Sponsored Sports Events (£000), Year Ending June 2007
Table 14: Main Media Advertising Expenditure on Sporting Events (£000), Year Ending June 2007
5. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
6. Buying Behaviour
Introduction
INTEREST IN TEAM SPORTS
Table 15: Any Interest in Team Sports by Sex, Age, Social Grade and Region (% of adults), 2007
REGIONAL AND SOCIAL GRADE INFLUENCES
PASSIONATE FOLLOWERS
Table 16: Major Team Sports Followed in the Media or as Spectators (% of adults), 2007
PARTICIPATION IN SPORT
Table 17: Regular Participation in Sports and Physical Activities (% of adults), 2007
7. Current Issues
Introduction
Football — Euro 2008 Qualifiers
England Bid to host World Cup 2018
More Open Competition in Premiership
Formula One's Lewis Hamilton
Rugby Union World Cup
Recent Sponsorship Deals
Awards for Sponsorship Campaigns
8. The Global Market
Overview
9. Forecasts
INTRODUCTION
Population
Table 18: Forecast UK Resident Population by Sex (000), Mid-Years 2007-2011
Gross Domestic Product
Table 19: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2007-2011
Inflation
Table 20: Forecast UK Rate of Inflation (%), 2007-2011
Unemployment
Table 21: Forecast Actual Number of Unemployed Persons in the UK (million), 2007-2011
FORECASTS 2008 to 2012
Table 22: The Forecast Total UK Sports Sponsorship Market† by Value and Number of Deals (£m and number), 2008-2012
Figure 2: The Forecast Total UK Sports Sponsorship Market† by Value and Number of Deals (£m and number), 2008-2012
Market Growth
Figure 3: The Forecast Growth in the Total UK Sports Sponsorship Market by Value (£m at rsp), 2002-2012
FUTURE TRENDS
Olympics Developments
Underlying Growth
Consolidation Among Sponsors and the Sponsored
Moving Sponsors Closer to Consumers
Crown Jewels Review
General Future Issues
10. Consumer Confidence
METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Improves
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Willingness to Borrow Slips Slightly
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007
SPENDING FROM SAVINGS
Slight Increase in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Saving Grows in Relative Importance
Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007
11. Further Sources
Associations
Publications
General Sources
Government Sources
Other Sources
Bisnode Sources
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