Sponsorship – A Bigger Picture Behind The Game

Long before the commercialisation made sports as a career, it was just an activity dedicated to the pure enjoyment, fun and in some cases, royalty. When rapid globalization began, the world saw a change in the way many promotions were carried out. That included sports as well. It is fascinating to know that the term ‘Sports Industry’ did not exist a hundred years back. Today companies are considering sports as a way to promote their brands and build a reputation among those who appreciate and value sports. With digitalisation, the reach of a game was not limited to a country alone.

To get to the bottom of it all, it is important to understand way sponsorship in sports functions. It is important to understand that none of the sponsorship that is shown to the viewers is done to promote that particular game or some athletes. In fact, the companies use the popularity of the sports and athletes in order to gain an extra over their competitors. And in order to do so, the hefty amount is paid by the companies to the concerned sports entity. For making the most out of the sponsorship, the sports entities are broadly classified into three major categories- Event, Team and Athlete.

Recently, Paytm made a big name when it sponsored India-New Zealand ODI series. While some companies choose to be associated with an event, many rely on the popularity of the team or club. It is perhaps one of the most successful and long-term investments by the companies. While agreeing to sponsor a team or a club, some sponsors choose to showcase its logos on the jersey, by paying a price which is higher than the rest of the sponsors. Some of the sponsors choose another kind of deal. McDonald’s might not integrate its logo on a jersey, but it will be interested to launch a new limited range of toys, themes and food line dedicated to the team. Pepsi stands as the beverage partner for Team India and Pepsi left no stones unturned to promote it.

Like every industry parameters, the sponsorship is also bound by many rules and contracts. FIFA earns a lot through sponsorship. According to a report by Portada, it made $ 1.4 billion, just through sponsorship for Brazil World Cup 2014, which was 10% more revenue if compared from South Africa World Cup. But even after paying this large set of payment, sponsors are still bound by certain rules. These rules change from event to event and may differ from team to team, but the core concept stands still. For example, if any sports entity is being sponsored by Nike, then no other sports apparel brand can enter into a contract with it, no matter how large the sponsorship amount is. Similarly, there can be just one ticketing partner, one beverage partner and one TV rightsholder partner.

But recently, a new trend has started to emerge out of this big bubble. Where on one hand, sponsorship has led to a rapid commercialisation of sports. Where ticketing and government funds were the only two sources of revenue and income, companies have fuelled in an unimaginable sum of money into sports, making sports an industry of its own. On one hand, it has acted as a catalyst for a younger generation to become a part of sports, even if it is for the sake of money, indirectly, the corporate rivalry that eventually gave rise to the sponsorship, had made sports industry more of its maid than the master. Companies are no longer depending on sports industry, they are moulding it, using it for its own benefit.

The popularity of a brand is now decided by the exposure it gets. And like many things that money can buy, sports entities are unfortunately one of them. A team if more in pressure to perform on ground, not because it needs to win for the nation, but mostly because it needs the sponsor to keep paying them. A sportsman is more worried about his score now because he is aware of the unfathomable circumstances if any one or all of the sponsors decide to pull out their money. But as long as they keep performing and viewers are enjoying the show, it is a win-win situation for both side.