Global Sports Sponsorship Spending Expected to Drop Precipitously
22 Jun, 2020By: Michael Popke
Cannabis Industry Gaining Ground as Major Sponsor, However
Global sports sponsorshiprights-fees will fall from $46.1 billion in 2019 to $28.9 billion in 2020 — a 37% decrease — thanks to COVID-19.
That’s the word from Two Circles, a sports marketing agency with offices in the United States, London and Switzerland. And it’s disastrous news.
“As a marketing platform to reach passionate and emotionally-engaged audiences at-scale in brand-safe environments, sports sponsorship is unrivalled,” Two Circles CEO Gareth Balch said in a statement. “However, with live sports halted globally since March, the value that sports properties have been able to deliver brand partners has been limited, with cost-cutting in sectors that invest heavily in sponsorship also presenting a significant challenge in signing new deals.”
The automotive, energy, financial and airlines sectors all suffered major blows during the pandemic, and they are among the top 10 spenders in the sports sponsorship category, according to Two Circles. The firm’s 2020 projections include a 55 percent drop in spending from automotive companies alone. Sports sponsorship spending in the financial services sector likely will be down 45 percent.
Balch remains hopeful, however.
“Though every corner of sports is hurting, we remain certain that sports’ economy will thrive in the long-term, and when the impending recession bottoms-out, all sectors will rely on the best marketing platforms available to grow their businesses,” he said. “The sports properties that use this period to invest in their sponsorship propositions, moving away in particular from analogue-led logo exposure to digitally-driven, tangible audience engagement, will be those that thrive most post-Covid-19.”
That said, one industry that may help pick up some of the sports sponsorship slack could be the cannabis business. FC Barcelona is looking to sell the naming rights to its Nou Camp stadium for the first time in the team’s history, and the team will donate all the revenue to coronavirus relief efforts. According to The Sun in the United Kingdom, “Mike Tyson’s cannabis business partner Alki David is reportedly in the mix to land the deal.”
“Billionaire David — who runs a CBD (cannabidiol) business with friend and ex-heavyweight champion boxer Tyson — believes he is in a good position to win the naming rights after entering negotiations with the Spanish side,” The Sun reports. “He said: ‘This is an opportunity that I am bullish about. It is an historic moment in the history of sport and it fits well with my current plans.’”
This would not be the first time cannabis sponsorships found their way into sports, but it could signal a shift in a post-coronavirus sports sponsorship landscape.