SPONSORSHIPS AND ENDORSEMENT LIFEBLOOD OF MODERN DAY SPORTS
Jan 25 - 31, 2010
Sponsorship is lifeblood of modern sports and endorsement enriches sportsmen all over the world. The rise of phenomena of sponsorship began to take shape with the advent of television in mid seventies along with corporate sectors realizing how the new medium could be exploited for making name, fame, and money. The live 24 hours television which squeezed the world into a global village brought new heights in sponsorship and endorsement. Some time the ego of the rich also played some part in bringing sponsorship never heard earlier. Remember Kerry Packer, the Australian media tycoon who brought huge money and changes in the traditional game of cricket beyond recognition when he retaliated for not getting TV rights for test series at home.
Prior to the advent of TV, the sports were supported by governments or the rich nobility .The money in the good old days was too small to mention. Movie actors were richer than the sportsmen. The Olympic idea of amateurism also blocked the way for big money to come in sports. Since the time immemorial sports was treated to enhance national and individual images and were never taken as a means to make money. However as the industrial age slowly engulfed the civilization and new inventions in media and sports started to take shape the new emerging corporate sector moved into make big money. The competition in corporate sector started the race for big money and sports were seen as one of the popular means to hit a jackpot. It was US television networks who opened the floodgates of money for sports. It all began with the USA TV networks CBS and ABC getting into race to show live Olympic action. The IOC, which earlier struggled to raise finances enough to keep the amateurish movement going suddenly found mythical King Solomon's mine when the American networks came up with offers worth million of dollars for the live television rights of Olympics in 1984 Los Angels Olympics. It was the greatest breakthroughs for Olympics which have lived on what could rightly be called shoelace string budget to hold its quadrennial event. With sponsorship bringing in money new sport personalities began to rise in tennis, athletics, motor racing, golf and soccer and many other sports. There was race amongst hundreds of companies and firms dealing in different commodities to get hold of well known names for marketing their products; thus emerged the concept of endorsement. Rolex Watch company offered million to some of the best known sports persons as marketing ploy. Every known company involved in producing goods from razor blades to perfumes, from shoe to suits all got into the melee to sell endorsement.
The sponsorship race has reached such a proportion that sports bodies plan years and months ahead of a huge international sporting event to clinch maximum benefits.
The International Olympic Committee is hopeful of signing a 10th top-level sponsor before the Winter Olympics start in Vancouver next month. The IOC is in talks with several companies about an 11th-hour deal in time for the winter Games.
The IOC set a $1b revenue target from its TOP (elite level) sponsorship programme for the Vancouver 2010 winter Olympics and the London 2012 summer Games. It currently has nine major sponsors for the Vancouver and London Games worth a total of $883m.
TOP sponsors confirmed for Vancouver and London are Coca-Cola, Acer, Atos Origin, GE, McDonald's, Omega, Panasonic, Samsung and Visa. Atos Origin, Panasonic and Samsung have extended their partnerships until the Rio de Janeiro 2016 Olympics, while Coca-Cola, Visa and Omega have renewed their deals with the IOC until the 2020 Games.
The fast growing sports of cricket is also attracting huge sponsorship money. The Board of Control for Cricket in India (BCCI) has renewed its media rights deal with Nimbus Communications. The television marketing company had reached an agreement with the BCCI in October to show a minimum of 64 international matches and 312 days of domestic cricket until 2014. The deal has only just been finalized after Nimbus furnished a bank guarantee for the agreement amount - $436m - to the BCCI. Nimbus has been the BCCI's global media rights partner since 2006 .Nimbus paid $612m - subsequently negotiated to $549m - for the last round of rights in February 2006.
The International Association of Athletics Federations (IAAF), the last post of amateurism in the world of professional sports launched string marketing and broadcast deals for helping it ride out the global economic downturn. Last year's IAAF World Championships in Berlin, which were backed by seven global sponsors, were broadcast in a record 201 countries around the world.
Samsung signed up as an IAAF sponsor in 2009, while long-term partner Seiko renewed its deal until 2013, extending a 25-year association with athletics' governing body.
In the field of broadcasting, the IAAF reached a partnership agreement for its international media rights in Europe and Africa with IEC Sport after a long tender process.
The IAAF also signed an extension of its long-standing agreement with Japanese broadcaster TBS until 2019. These agreements, together with the IAAF's long-term relationship with worldwide marketing partner Dentsu, provide strong financial guarantees for the future.
Adidas one of the biggest companies dealing in sport wear is preparing a huge marketing push to promote its sponsorship of next year's Football World Cup in South Africa, which it hopes will give it an advantage over bitter rival Nike. There is no doubting the importance of the event for Adidas. Company's director soccer admitted that 2009 was a tough economic year for many companies but is hopeful that Adidas could do with the world cup boost. In its latest results, the company reported third-quarter sales of $3.2bn. South Africa's cell phone advertising industry would be strongly boosted by the 2010 World Cup. Mobile advertising is expected to be the key driver of the UGC (user-generated content) market in South Africa as the country prepares for the world's most-watched sporting event.
The country's UGC market, which included advertising-funded social networking, chat and dating services like Face book and MXit, was expected to grow to 24 million users and $476 million (R3.7 billion) in revenue by 2013 from a current 14.2 million customers and $195m in revenue, JBB said. Many advertisers want to take advantage of this global event. At the end of the day, this could mean more money towards mobile advertising. Hyundai and Lucozade Sport have signed up as joint sponsors of ITV's World Cup coverage.
The multi-million-pound deal will include 32 live games, highlights and online coverage during the month-long tournament that takes place in South Africa in June and July next year.
The two brands have agreed a similar deal to Budweiser and EDF, who were joint sponsors of ITV's coverage of the 2006 World Cup.Hyundai is the official automotive partner of the Fifa World Cup, while Lucozade Sport is the official sports drink of Team England.ITV is understood to be in negotiations with the BBC about how to split coverage of the 64 matches. Professional Golf suffered when games leading icon Tiger Woods crashed his car head on against a tree while escaping the swinging golf club at home in the dead of the night. The game lost huge sponsorship but some officials of the PGA Tour put up a defiant face saying that the organization's business model is robust enough to withstand the absence of Tiger Woods. The golfer's decision to take an indefinite break from golf could cost the Tour, TV networks and merchandisers more than $200m.
Basketball which is third most popular sport in the USA after American football and baseball had signed deals with Time Warner Cable Inc, Cablevision Systems Corp and Dish Network Corp to carry NBA TV, raising its distribution to 45 million U.S. homes.
Terms of the deals were not disclosed, but they boost the reach of the U.S. sports league's network from 12 million homes last season. The NBA signed similar deals earlier this year with Comcast Corp, Cox Communications Inc, DirecTV Group Inc and Verizon Communications Inc.
Time Warner Cable will offer NBA TV to customers on its digital basic tier, while Cable vision will make the channel available on its digital package, the NBA said. Satellite provider Dish will carry it as part of its "Classic Silver 200 Package".