Team Sponsorship: Advantages and Disadvantages

In the previous articles, we have already come across the concept of team sponsorship. We have seen how teams can sell different types of sponsorships in order to raise money. This definitely ends up increasing the cash flow as well as the return on investment for the team.

It also generally provides a positive return on investment for the sponsor as well. This is the reason why popular sports teams have almost no issue in obtaining a sponsor.

As soon as one sponsor leaves, there is always another one available to provide the required monetary compensation to the sports team. However, it needs to be understood that team sponsorship has its own pros and cons which must be taken into account before a decision regarding such sponsorship is made.

In this article, we will carefully explore the pros and cons of team sponsorship.

Advantages of Team Sponsorship

There are many sponsors who want to spend money to obtain the right to be associated with a popular sports team. The common advantages which are derived by the sponsors are as follows:

1. Increased Exposure: Firstly, it is important to note that sponsoring any sporting league team provides increased exposure to the brand that is providing sponsorship. This is because the publicity related to the event and the event itself lasts for close to two months.

   During this time, the sponsor is provided with a lot of publicity. This happens because for every formal event, viz. after-event parties, press conferences, etc., the team is generally supposed to be dressed in their official uniform. Since the official uniform carries the logo of the sponsor, the number of impressions received rises exponentially. This publicity blitz is considered valuable by several sponsors.

2. Community Relationships: It is also important to note that providing sponsorship to a team generally builds a positive image in the minds of the local population. It is common for citizens of a city or town to be proud of their sports team.

   Hence, such citizens naturally develop an affinity towards the sponsors of the team. Eventually, this results in positive word of mouth about a brand in a certain geographical area which makes it easier for the brand to attract and retain customers.

3. Supersedes Individual Sponsorship: It is important to note that many individual players have their own sponsorship deals with different brands.

   However, the team sponsorship deal supersedes such individual deals and as a result, is provided a higher priority by the league when it comes to publicity. As a result, sponsorship of the entire team turns out to be more economically beneficial as compared to an individual.

Disadvantages of Team Sponsorship

There are several issues that are commonly associated with team sponsorship as well. Some of the issues which are commonly referred to in the media have been explained below:

1. Multiple Sponsorships: Up until now, whenever we talk about sponsorships, we assume that there is only a single sponsor which is associated with the team and all the benefits are likely to accrue to them. However, this is not the case many times. It is common for the same team to be associated with various sponsors.

   For instance, the same team can have a t-shirt sponsor, a sleeve sponsor, a stadium sponsor, and so on. It is common for most teams today to have as many as nine sponsors! In such cases, none of the teams are able to really benefit from the association with the sports league. This is because the presence of a large number of brands ends up creating brand clutter. As a result, the name of any of the sponsors does not register with the viewers.

   Hence, marketing experts have suggested that brands should shy away from associating themselves with teams as well as leagues where there are multiple sponsors already present.

2. Changing Advertising Landscape: The idea of sponsorship as well as the measurement of the effectiveness of the sponsorship seems to be based on an age-old understanding of advertising and promotions.

   Most benefits of sponsorship are calculated based on the number of impressions. There are many marketing experts who believe that the number of impressions is not relevant to marketing today. This is because modern-day marketing which happens via online media is able to provide a much higher return on investment since it has a higher engagement. It is important for the sponsors as well as the sports team to quickly adapt to this changing landscape.

3. Expensive: The sponsorship of an entire team can be very expensive as compared to sponsoring an individual player.

   Also, in some teams, there are only one or two-star players who have the most fan following. In such cases, it may be more prudent to sign those players as individual players instead of paying money to the entire team in lieu of their sponsorship rights.

The fact of the matter is that the sponsorship of teams that participate in sports leagues is an expensive affair. Also, it has its own pros and cons. However, generally, the pros outweigh the cons. This is the reason that most teams around the world are able to obtain fairly lucrative sponsorship deals.