Sponsorship Snacks

Week 15

Created by Advanced Sponsorship Insights

Introduction

This week’s news was overshadowed by the European Super League. In case you live on the moon and have missed it, here is a summary:

  • Sunday: Several top clubs formed a breakaway European club competition that would if it comes to fruition, upend the structures, economics, and sponsorships of Football.
  • Monday: FIFA, UEFA, and the national leagues publicly condemn the participating clubs and threaten to disqualify them from current and future competitions
  • Wednesday: After a HUGE public outcry, the English clubs appear to back out again

By now, nobody knows whether the remaining clubs will go through with the project, but the horizon does not look too bright for the European Super League right now.

The European Super League — Football, As We Know, Is About to Change

This topic is so complex we have dedicated it to a stand-alone article. You can read it here.

Here are three consequences an European Super League would have for Football:

  • FIFA, UEFA, and the national leagues would have to renegotiate their broadcasting and sponsorship agreements. Without the top teams, the current competitions lose their main attractions. Consequently, the sponsorship rights would be worth less than before.
  • The ESL would also have serious ramifications for the smaller clubs. Due to the pandemic, many clubs already face a financial crisis, which may be amplified by the ESL.
  • Ultimately, the ESL will create a new sponsorship landscape. New types of sponsorship will emerge. ‘Match-day sponsorship’ will become less important, while digital sponsorship will reach new highs. We anticipate the sponsorship landscape to divide into either a global or local level. The “middle class” of sponsorship disappears

Formula 1 goes Spring Breaking in Miami

Miami is a dream destination for many tourists. Sunny weather, beautiful beaches, and the laid back attitude are Miami’s main attractions. That is probably why Formula 1 had ongoing talks about adding a race in the city for about ten years. Now it is finally happening. The first race will take place in summer 2022, and the two parties agreed on a ten-year duration.

The deal comes at a good time for Formula 1. Their Netflix documentary ‘Drive to Survive’ has been a global hit, and (as we discussed in a previous Snacks) their social media presence is growing strongly. It seems as if Formula1 has figured out how to navigate modern social platforms.

Our data team confirmed their Netflix documentary hit exactly the right target group in the US. 43% of American Formula 1 fans are younger than 35 years. That being said, only 7% of Americans follow Formula 1. From a global perspective, 14% follow the iconic racing cup. It’s clear that the US is still an underdeveloped market for Formula 1, and the Miami deal could enable them to increase their presence drastically.

The pandemic and the shortened season have hit Formula1 hard, and it seems as if the league has understood that it needs to change to survive. From 2007 to 2018, the combined sponsorship portfolio value has nearly halved (Source). Like the other big sports leagues (NBA, Premier League, etc.) Formula 1 knows that it must drive fast towards internationalization if it wants to return to the glorious days.

But if Formula 1 keeps expanding internationally and keeps attracting young fans, their portfolio value could see an uptick soon. We expect the sponsorship competition to increase once the first deals are expiring. Watch out for global brands to join the sponsorship portfolio of the F1.

The PGA Tour created a data-driven bonus system

The newly created ‘Player Impact Program’ will distribute a total of $40 million in bonuses to the players. How big of a share a player gets depends on his so-called ‘Impact Score’. The Impact Score rates the popularity of every player based on six metrics, including Google Trends, social media data, and performance (Source).

What’s interesting is that only one of the six metrics is based on performance. Simply put, the sporting performance doesn’t matter too much as long as you’re interesting off the pitch. Similar to the concept of the European Super League, Golf is focussing on its entertainment value.

Yet, there is another wrinkle to this. Scoring Systems like the ‘Impact Score’ are a clear sign that data continues to get more important in sports. Last week, we discussed how Kevin De Bruyne used data to negotiate his new deal. Going forward, players could use metrics like their Impact Score to negotiate sponsorship deals.

For sponsors, it is now more important than ever to track and evaluate data. As players continue to rely on data to make career-defining decisions, brands must be ready to talk data in their next contract negotiation.

NHL adds sponsorship opportunities to compensate for the pandemic loss

It is no secret that sports has been hit hard by the pandemic. Sports organizations all around the world are looking to generate new revenue streams. That has led to many American leagues relaxing sponsorship regulations.

The NHL market provides a huge opportunity in terms of reach. In the US, 20% of the population follows the NHL, and in Canada, it is a staggering 37%. And all these fans seem to be okay with new sponsorships. 72% of NHL fans either support logos on jerseys or feel indifferent about it (Source).

The NHL has already allowed helmet sponsorships, and now they are discussing jersey sponsorships. And so far, the NHL seems to like what they’re seeing. According to the NHL, commissioner teams have retained more than US$100 million in revenue through new sponsorship inventory brought in for the current season (Source).

A successful sponsorship in the NHL will depend on two main aspects.

  1. Brands need to figure out whether they are the right fit. 30% of American sports fans state that their opinion on jersey ads depends on the sponsor (Source).
  2. Brands must find a way to optimize their logo visibility despite the fast-paced nature of ice hockey. The NHL has already hinted that they would work together with the sponsors to maximize visibility during the broadcast.

Let the sponsorship frenzy begin!

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

fabian.vermum@advanced-sponsorship-insights.com

jack.goodloe@advanced-sponsorship-insights.com

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