Sponsorship Snacks

Week 6

Let’s start the week with some good news. Nigerian economist Ngozi Okonjo-Iweala has been appointed the head of the World Trade Organisation (WTO). She set multiple milestones for the position. She is the first female and also the first African WTO president. However, Okonjo-Iweala is confidently looking forward. Replying to the question of whether she feels an additional burden, she states that:

“All credit to members for electing me and making that history, but the bottom line is that if I want to make Africa and women proud, I have to produce results, and that’s where my mind is at now.” (Source)

With Black History Month being celebrated, and International Women’s Day coming up in March, the appointment of Okonjo-Iweala is a great sign for the future.

The new WTO president will have her hands full, and she will need all her skills to navigate the world economy out of the pandemic. For sponsors, the biggest future threat is the Olympics 2021 in Japan and the Winter Olympics 2022 in China. More on that below.

News

MotoGP extends Milestone gaming deal until 2026

• The deal includes the development of an annual title covering across all gaming platforms. Besides, the gaming developer will sponsor one Grand Prix each season (Source).
• Esports showed that it can unite motorsports fans from different genres (Nascar, F1). Sim racing has arrived as a major branch of motorsports. With some virtual races getting more viewers than their real-life counterparts. One reason why sim racing is popular among fans is that they can steer their dream cars themselves. With the new generation of consoles and the emergence of virtual reality, fans can experience even more realistic experiences than before.
• Even though the viewing numbers are high, sim racing is still in its infancy. It offers brands a unique opportunity to act as a first mover. While other esports are already in the accelerated phase with increasing sponsor competition, sim racing is still an endemic niche. While it may take some time for sponsors to reap the benefits of an investment, they could establish an authentic partnership if they invest now.

New Balance wants to retaliate after Liverpool loss

• After losing Liverpool to Nike in spectacular fashion (more on that in that in the future, stay tuned!), New Balance has money to spend — $55.9 million to be exact.
• This week it was announced that New Balance replace Nike and become the official supplier of AS Roma.
• Roma is the first Italian team that New Balance sponsors. That could be a good indicator for the future strategy of the sportswear company. While nearly all of the top teams in Europe are covered by Adidas or Nike, New Balance has a chance to focus on the second-tier top clubs’ such as Roma, Lille, Porto, etc. (Source).

Maradonna’s Porsche will go off for auction

• Maradona’s rare 911 Porsche is considered to be worth about $200.000. Few other cars could be a better representation of the flamboyant Argentinian superstar. In Sevilla, Maradona was once stopped by the police because he drove 180 km/h, in the city center (Source)
• For Porsche, this might be a unique chance to establish a legacy sponsorship. Some things just go together, like Aston Martin and James Bond or Roger Federer and Rolex. After the documentary about Maradona was released in 2019, the public celebrates the star for the last time. Now is the perfect time to join the party for Porsche. A memorial campaign would be authentic and memorable since there was a natural fit between “El Diaz” and the luxury car brand.

How FC Barcelona and BEKO work out the impact of the pandemic

• Barca has seen better days … They are struggling to keep up with their two biggest rivals from Madrid and recently took a 4:1 beatdown from Paris Saint Germain in the champions league.
• Did the long-time partner BEKO notice? While BEKO was willing to extend the sponsorship before the pandemic, they have now decided that they will not extend the contract. However, Barca was able to avoid a contract termination by adjusting the initial deal by reducing the cost of the final year by about 50%.
• The adjustment shows a trend in sponsorship. Sponsors are regaining power in their relationship with sports clubs. Pre-pandemic demand for sponsors was high — but the supply was limited. Times have changed; Sponsors are thinking twice, and clubs are more willing to make compromises.
• Back to Barca and BEKO; Once the pandemic is over (and a new set of ‘La Masia youngsters’ emerged,) the relationship between the club and sponsor could rehabilitate. If Beko keeps the sponsorship, fans could perceive it as more authentic since the sponsor was supportive through hard times (Source).

The Golden State Warriors launch Game Mode second-screen fan experience.

• Golden State chases after the spirit of their silicon valley neighbors and continues to innovate. It must be the San Francisco air. The Warriors are the first US professional team that collaborates with LiveLike to create a new fan experience. Within their app, fans interact in live chatrooms, game-specific polls, and play-by-play updates.
• Golden State is looking to diversify its revenue stream and provide new touchpoints with its fans. Meanwhile, they build a stronger fan-club relationship. Additional income is especially important for them since they just opened up their new arena. With no fans being allowed at the games, the Warriors have to be careful not to fall into debt.
• If Golden State can keep their fan’s attention on their platform instead of losing it to third-party apps, the new game mode will be a powerful tool. The club can use it to drive engagement as well as look for additional sponsors (Source).

Food For Thought

• Do you still think that TikTok is not yet at a point where you should take it seriously? Well, look at this graph and think about your answer again. Contrary to other social media apps like Instagram, Facebook, and Twitter, Tik Tok’s has been growing by 75% in 2020 (Forbes) and is relevant today.
• Meanwhile, football clubs are looking for new revenue streams since the pandemic has taken away most of their gate revenue. After some timid first experiences with the new social media app, clubs have been increasing their involvement with the Chinese app. Needless to say that the combination of global sports stars and short video clips is a match made in heaven for clubs. The relationship between sports and TikTok took on new heights after the social platform has been announced as a global sponsor for the Euro 2021 (Source).
• Take this video of Barcelona player Frenkie de Jong as an example. That is no revolutionary content, yet TikTok fans love it since it fits perfectly to the main idea of TikTok: challenge videos. Barcelona, Real Madrid, and PSG have established a combined following of sixteen million with these short clips. While Instagram videos require a high-quality production, TikTok is about spontaneous and unperfect videos. That surely brings a smile to the worried faces of many financial managers of sport clubs.
• However, original TikTok content is probably more difficult to create than Instagram. Contrary to Instagram, TikTok needs attention and creativity since it is based on changing trends and challenges. The social media managers must know what GenZ thinks is cool. Big clubs will probably ask for external advice from social media consulting companies, while smaller clubs can experiment and get creative.
• That leaves mid-level clubs with an established media department. Those teams have to be careful not to miss the TikTok train since their media department might fail to adapt to the new platform. An example of a middle-sized club that understood how TikTok works is AS Roma.

Case Study

• The pandemic shows no signs of slowing down, and Japan won’t start vaccinating citizens until the end of February. China, on the other hand, faces heavy criticism because of the human rights situation in Hongkong, and with the Uighurs. There are geopolitical and societal issues surrounding the next two Olympic Games that brands struggle to find an answer for.
• More than 180 rights groups have demanded a boycott of the Winter Games (The Guardian). This week the president of the Tokyo Olympic organizing committee, Yoshiro Mori, resigned after he made sexist comments (BBC). Successful events depend on the positive attitude of the population. Because of those negative headlines, the public’s opinion is shifting. Corporate Sponsors are getting anxious and start to rethink their involvement with the Olympic Summer Games.
• The controversial nature of the upcoming Olympic events puts sponsors in an impossible situation where they have to choose between a scandalous liaison with the games and the much-needed profit that the games generate. Nike, for instance, grew revenue 24% in China last quarter, compared to just 1% growth in North America (Bloomberg). Many brands are in desperate need of awareness opportunities and invested heavily in their Olympic activation. As a brand, you don’t often have the chance to see your logo next to a fist-pumping Naomi Osaka and reap the benefits from it.
• Sponsors must be aware that China will not hesitate to sanction brands or organizations that publicly criticize them. After Rockets general manager Daryl Morey posted a tweet in support of the pro-democratic movement in Hongkong. China stopped televising Rockets Games and demanded that the NBA fires Morey.
• However, the pandemic has changed consumer behavior. 80% of respondents of the Edelman Trust Barometer indicated that they want brands to solve society’s problems.

Bottom line: The choice between dollars or support of societal movements is becoming increasingly difficult. Brands will have to consider both the pros and cons of their partnership with the Olympics.

For more expert insights into sponsorship data & analytics visit us on Advanced Sponsorship Insights.