Why sponsors need to renegotiate the rule book

In recent weeks the sponsor’s role has come in for criticism following Nationwide’s stance on former England coach Glenn Hoddle.

Many have questioned the company’s right to do so. Some believe it is entitled to voice its opinion, given the substantial investment it has made in the sports body. Others argue it should have left matters to those directly involved, namely the Football Association.

The only question that any sponsor need ask in such a situation, is whether it should speak out to protect its brand’s values. If a company feels its brand values are being undermined, then it has every right to protect them, even if it leaves itself open to criticisms of interfering.

Sports sponsorship is nothing new, but the nature of arrangements between the broadcaster, the sponsor, and the sport, is changing rapidly.

Various sporting bodies recognise the value of a broadcast sponsorship, and, more importantly, the danger of not having any say in who takes up the broadcast sponsorship. This is because a variety of live and broadcast sponsors can, if unchecked, increase the clutter, diminish standout from rival brands, and ultimately lead to a devalued property.

For example, I still find it a little odd to watch the FA Carling Premiership on Sky, sponsored by Ford. Or the Nationwide Division One Championship, in association with Duckhams. As a result of such deals, the event sponsors are quite rightly seeking assurances prior to agreement, as to who could or should be the broadcast sponsor.

This year, two major sporting events will be broadcast on television, the Rugby World Cup and the Cricket World Cup. In both cases the event sponsors have been asked to take on the broadcast sponsorship before it is made available to the market.

Some sports have gone further still. They have bought or kept the rights to the broadcast sponsorship so they can sell it as part of the package to an event sponsor. This has been most in evidence at the UEFA European Champions League, with the English FA attempting to follow suit with the properties it owns. It will become more commonplace in the future.

But is it desirable or just a way for the sporting bodies to claim a larger slice of the cake? If the sponsorship includes broadcast credits, a fee still has to be paid by the sporting body to the broadcaster. But it is now the sporting body which carries out the negotiations rather than a sponsorship agent, who presumably might simply try to conclude a more profitable deal. On the whole, the intention to sell both event and broadcast sponsorships as a package are to be applauded, as advertisers are increasingly seeking integrated arrangements.

The onset of digital television is something we should also welcome, because among other things, it will add value to sponsorships. This is particularly true for sponsors of sports which do not currently have a terrestrial broadcast platform. Digital TV – which will probably be hungry for content – will no doubt provide the platform for these sports, so improving the value of the sponsorship. Greater digital bandwidth will mean greater possibilities.

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