We all continue to talk and write about how the economy is affecting ticket sales. But what about sponsorship? In the world of venues and sports marketing this revenue source can be even bigger then ticket sales.
The media is always discussing how the economy is going to play at the box office. They talk about teams freezing their prices, rolling back prices, and offering special package deals. But they don’t seem to talk much about how sponsorship dollars are affecting the team. In today’s Wall Street Journal there is an article on the Hicks Sports Group, owners of the Texas Rangers & Dallas Stars. They have recently defaulted on a $10 million interest payment. The article concludes with the fact that “the poor economy has dried up interest in sponsorships and ticket sales”.
Venues, sport teams, and shows don’t talk about sponsorship revenues. They are like gold doubloons in the treasure chest and buried away. This is usually one revenue source they don’t share. Ticket sales are always split among various parties but not sponsorship revenues. You can figure out how much ticket revenue comes in by seeing the attendance but sponsorship is almost impossible to figure out.
I am not surprised that sponsorship dollars are drying up. I have been working on a few projects that involve sponsorship dollars. I know it sucks out there! In the past we all have gone after them looking for ridiculous sums of money and in many cases have received it. But times have changed. The bean counters are now running the companies. They are looking at every dollar and want to see the return on investment. If you don’t put together sponsorship packages without an ROI for them, then you will most likely be SOL.
I remember reading an article several years ago about the CMO of Coca-Cola. He discussed how he was watching a minor league baseball game on cable TV. There in the outfield he saw a Coca-Cola sign on the centerfield wall. Even though he had never been to this ball park he felt as if he had seen it before. The next business day he was walking down the hall at Coke’s headquarters and there on the wall was a picture of the same ball park with the same Coca-Cola sign on the centerfield wall. The picture was from the 1950′s. At that moment he made the decision that Coca-Cola sponsorship was no longer just about signage. He wanted the Coke brand to be part of the sports or entertainment brand he was sponsoring. His first project was creating a Coca-Cola area at the Atlanta Braves new ball park. In this area kids could play and interact. If the Braves hit a home run the giant Coke bottle would shoot out pyro. If a player hit a home run into the Coke area, the first kid who picked it up would get a college scholarship. That is what sponsorship is all about. This is why I call sponsorship: a partnership.
Yes, companies have cut way back on sponsorship dollars. Yes, the sales force has to work twice as hard to bring them in. Sponsorship sales departments at venues, teams, events, and shows need to scrap all the old ways they pitched and positioned sponsorships. You need to look at yourself as a marketing and promotional partner for these potential sponsors. Signage and “presenting” sponsors are not what they used to be. How do you translate that back to ROI for the sponsor? Just like you they need to move product. Be a good marketer and figure out how your brand will make money for their brand.