TOUGH REALITIES JOLT SPORTS SPONSORSHIPS

By Published on .

Yes. Sports sponsorship is a nearly $3 billion industry attracting some of the biggest marketers in the world.

No. Those marketers don't mindlessly lavish money on sports-related deals, and some of them are revamping the criteria by which they judge the viability of sports sponsorships.

Such rethinking by IBM Corp., General Motors Corp., Reebok International, Sara Lee Corp. and Sprint isn't a repudiation of sporting events and properties as marketing vehicles. But leaner budgets and meaner competition are requiring companies to leverage their sponsorships with greater sophistication.

This significant shift was discussed in depth at the Sponsorship Forum, the first annual gathering of top executives from the corporate, media and property sides of the sports marketing industry. The roundtable discussion last week in New York was organized by Clarion Performance Properties, a sports marketing agency in Greenwich, Conn.

Other sports marketing heavyweights at the forum included Walt Disney Co., True Value Hardware and ABC, as well as the National Football League, National Hockey League and Women's Sports Foundation.

Few companies have altered their sports marketing strategies as much as IBM. But few have undergone as much change in the past year, as IBM centralized its marketing operations and slashed its work force by 48% to 220,000.

The company also has "taken a machete to its sport sponsorship roster," opting to keep ties to the National Basketball Association, the Olympics, pro golf and tennis, said Elizabeth Primrose-Smith, IBM's director of worldwide Olympic and sports operations.

Those sentiments were echoed by Mike Goff, Sprint's director of corporate sponsorships, and Patrick Kemp, general director of marketing operations for GM's North American Operations.

"In the past we used to be involved in hundreds of sponsorships," Mr. Kemp said. "Now, we can add them up on two hands."

Before the tough times of the early '90s, sports marketing decisions pivoted on an executive's vanity-hospitality at the Masters or 50 yard-line seats for the Giants.

Ms. Primrose-Smith blasted IBM's OS/2 Warp division for sponsoring the Fiesta Bowl. When she decided not to renew the deal earlier this year, OS/2 executives suggested a joint sponsorship with rival Apple Computer.

"They had no clue about leveraging or exclusivity," she said. "It was just a bunch of people who liked football."

At GM, executives now file some 25 sponsorship proposals each day straight into the trash, as most of them fail to address the carmaker's marketing needs.

Reebok (which also nixed a Fiesta Bowl sponsorship recently) reserves sponsorship dollars for properties that it can build product lines around. True Value signed a $25 million deal with the NFL (and an as-yet unannounced and unactivated deal with Major League Baseball) so it can sell logo rights to its store brands and other accounts.

In this article:
Most Popular