Sports Sponsorship

Key Note Publications Ltd

- Pub ID: KEYL1614149

Countries covered: United Kingdom

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.

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