If you work in sponsorship, marketing, brand, sports, media, or a similar role, then our sponsorship series is for you. Come along as our sponsorship product expert, Patrick Westbrook, guides you through the basics of what sponsorship is. With more than 6 years in the industry, he explains why sponsorship is important and how to maximize your organization’s return on spend. Jump into this unique series at any point, but each post is designed to build your knowledge, ultimately helping you understand how to leverage sponsorship opportunities effectively for your organization.

The first post in this series introduced the basics of sponsorship and why it’s so important to the organizations that use them and to the brands that buy them. Here, you’ll learn what a sponsorship deal looks like and common types of sponsorship.

Assets in Sponsorship

Sponsorships are a unique collection of assets, as we now know. Each one can be different not only by their objectives but also by the product mix used to achieve those goals.

Sponsorship deals are made up of things we aptly call assets. Sponsorship assets are useful or valuable items an organization has available in their inventory to carry out messaging. Assets can be physical such as a billboard, time based like a radio ad, or virtual such as a website banner. As technology and consumer preferences change, assets evolve to meet demand. With innovations such as social media, NFTs, and more, digital, and virtual assets are much more commonplace. Whether the assets be physical, digital, time, or any other type, each should contribute to the objectives identified in creating the deal.

Common Assets 

While assets vary across deals, the following are the top 10 assets by revenue according to our research.

• Entitlements include title & presenting sponsor of an event or jersey, venue naming rights, and rights and designations
• Signage includes static and LED at the playing surface level and in-bowl
• Tickets/hospitality include premium seating in certain sections, suites, or seasons.

While these might be the more recognized assets across deals, sponsorships are often built using unique assets for specific outcomes or objectives. Our previous blog explained how a unique marketing deal typically has associated objectives.  These objectives might center around brand awareness and recognition with the end goal to lift sales. For example, Miller Lite is the official beer sponsor of the Dallas Cowboys. Miller Lite competes with other products, such as Bud Light which typically is the number one selling beer. To help Miller Lite grow their brand, and hopefully sales to dethrone Bud Light, they sought out a deal with the Cowboys who has one of the largest fan bases globally. Fans are likely to think good things about the brands that associate with their favorite teams, so for Miller Lite, this deal was strategic to get the “good vibes” with such a large fan base.

Unique Sponsorship Assets

Let’s examine the TXU Power Play for the Dallas Stars (NHL). Since opening in 2001, TXU Energy has been the official energy provider of the American Airlines Center, home of the Dallas Mavericks NBA team and Dallas Stars NHL team. As a prominent energy provider, TXU brands themselves through a specific moment in hockey games, specifically the “power play.” Unique creations can create not only valuable assets for the future, but also help   brands become more recognizable for the fans. Much like what we see with associating Hockey’s Power Play with an energy company.

Outside of unique or common assets, we must nod to one of the biggest-ticket assets: naming rights; entertainment venues. It’s become the norm for a stadium like Busch Stadium in St. Louis, or Citi Field in New York to carry corporate names as part of a major sponsorship deal There are exceptions to this when maintaining tradition is a priority, like Yankee Stadium. These instances are significantly less common, but arguably more iconic. The history of naming rights can be traced back to 1912 with Fenway Park. When the stadium opened in the Fenway neighborhood, the building’s owner (John Taylor) claimed the name was influenced by the area, but he also had a realty company named Fenway.

Types of Sponsorships

Two of the most common types of sponsorship in the sports & entertainment space fall under financial and in-kind. Each of these types influence the way a buyer will pay for the assets.

1. Financial: Financial sponsorships are straightforward transactions. The seller will list out relevant assets with prices and legal verbiage and the buyer will pay the seller according to a stated cadence; up-front, annually, or other payment schedules agreed upon between the two parties.
2. In-kind: In-kind sponsorships can become much more creative transactions. In this scenario, the buyer will trade goods or services of their own that have equivalent value to the assets the seller has. For how simple or complex sponsorship deals can be, the idea of traditional bartering has not been lost.

In-kind partnerships are often associated with something the team can physically use or consume. Travel and accommodation partners will often exchange their logistics and operations for partnership value with a team. Another example would be IT related companies, such as Microsoft, providing computers/tablets to be used by various teams.

Summary

Up to this point, we should have a firm understanding of what makes up a sponsorship deal. When dealing with asset mixes, it is important to not fit you or your organization into a box of what to sell. Think about the discussions you are in with your buyer or seller and what you both need to achieve. Be creative and plan unique assets for a partner, and most importantly how it will help you both achieve your objectives. You never know if what you create can be the next “naming rights” level asset.

Up Next

We will look at the department structures, roles, and other personnel involved in the sponsorship process, so that everyone that needs to team up can work together to reach the established business objectives for a solid sponsorship deal. 

Here at KORE, we geek out about sponsorship analytics, data, and ROI. Often, we can get really into the weeds about performance metrics, objective setting, data aggregation, partner identification and the list goes on… We thought we’d take a step back and tap one of our product experts for a high-level, educational view of sponsorship at its “KORE”. Whether you’re at the beginning of your career and interested in getting into sponsorship, or you’re just curious how industry professionals view and define the space, we hope this editorial answers all your burning sponsorship questions.  Stay tuned for more installments of our KORE University, coming soon.

Throughout 2022, we will explore the fundamentals of sponsorship. Instead of trying to jam pack a complex world into a singular blog, we will get more in-depth with topics over this time. Starting with this introduction, we will explore the following:

1. What is sponsorship?
2. What is in a deal?
3. What are the key roles you see in sponsorship?
4. Data Part 1: Objectives, Key Results, & Asset reporting
5. Data Part 2: Performance Reporting & Recaps

At the end of this series, I hope individuals can understand the key fundamentals of sponsorship. For someone new, this will help provide that baseline. For someone experienced, this might serve as a refresher or resource to help others.

What is Sponsorship?

Depending on your Google search prowess or the department someone resides in, you are going to find a range of definitions and views of sponsorship. Which is not a bad thing, it is what makes this such a unique type of business! However, it may be confusing at the start. Regardless of the interpretation, we must start at the core. Merriam Webster defines sponsorship as:

“A person or an organization that pays for or plans and carries out a project activity”

One entity is paying, in some manner, for something to get something out of it. Straight forward, we have a buyer & a seller. Understanding its core, sponsorship is like every other purchase we deal with on a day-to-day basis. That being said, what is sponsorship and what makes it different?

“Sponsorship is a type of marketing transaction where a buyer provides money and/or product & services to a seller, who provides access to a market via goods, activities, rights, and/or marketing to the buyer” -Me

Purpose of Sponsorships: Buyer vs Seller

As a buyer in sponsorships, you are likely motivated by marketing. Common thoughts buyers have might include “I want to grow my brand based on certain business objectives, so let’s go sponsor or partner with someone that aligns with those objectives.” Each buyer is different and even the departments within a buyer would be different, but you will often see a buyer is wanting to grow brand awareness and/or increase sales. How buyers achieve those objectives is what makes each sponsorship deal unique.

Sellers are what you would expect in a normal business transaction. Sellers are attempting to increase revenue by selling what available assets they have in use. A primary thing buyers want from sellers is access to a market. In sports & entertainment, that is the fans. How the buyer attempts to reach out to the seller’s audience contributes to each deal’s uniqueness and what assets the seller will use to grant visibility to the market. Are fans the only reason buyer’s do what they do? Absolutely not but it can arguably be the most important.

Examples

Over the past few years, we have seen the introduction and growth of jersey sponsors in the NBA and helmet sponsors in the NHL. These marquee assets empower Brands to attach emotions to a brand name. This new visibility for Buyers provides additional ways to access markets.

When Crypto.com took over the naming rights of the Staple Center in 2021, there was polarizing feedback from the public about how iconic the name “Staples Center” was to Los Angeles and the entertainment world. Even though an office supply retailer and an online financial exchange might have nothing to do with each other, both names now resonate with audiences by attaching themselves to the memories live events bring and the markets that will watch.

Sponsorship vs Partnership

There is a growing trend with the sponsorship landscape where the word partnership is used interchangeably with sponsorship. Why is that? Overall, partnerships have a better ring to it than sponsorship. Sponsorships, as we defined earlier, are more of a one-way transaction. However, partnerships typically involve additional legal hurdles and have a shared responsibility within your organization. A sense of “let’s grow together” or in other words a two-way transaction involving more than marketing assets.

A great example of a partnership (outside of sports), the relationship between McDonalds & Coca-Cola. To overly simplify the partnership, both have vested interest in each other’s success and have grown together since 1955! Coca-Cola has created a whole division dedicated to their business with McDonald’s and the long-term success of the partnership.

For the sake of this series, we will refrain from using the terms interchangeably, but it is important to know that for organizations there can be a difference.

Summary

Let’s recap the major takeaways from today.

1. Sponsorships are a type of marketing deal involving a buyer and a seller.
2. Sponsorships can be complex as they can differ in goals based on the person, department, or entity.
3. There is a difference between sponsorship & partnership for many organizations, and we should be at least aware of that.

Up Next

Now that we have our base understanding of what sponsorship is, next we will explore the types of sponsorships and what types of assets you can see within a deal.