On Friday, November 26, I traveled to Las Vegas, Nevada, to watch the Duke University Blue Devils play against the Gonzaga University Bulldogs. In a matchup of two of the top-ranked teams in the nation, in front of over 20,000 fans in attendance and millions more watching at home and online, Duke won by a score of 84-81. Despite the raucous crowd and post-season feel to the game, what stayed with me on my drive home was the name of the game itself: the Continental Tire Challenge. Named for the sponsor of the event, everything from the logo at center court to the game MVP trophy was named after Continental Tire. Despite my best efforts, I was unable to find the price Continental Tire paid for the naming rights of the event. But rest assured, the corporation paid a large amount to host the game that featured the number 1 ranked team in the nation facing off against legendary coach Mike Krzyzewski in the last year of his illustrious career.
In this article, I will examine current literature that identifies new and unique ideas of sport sponsorship and evaluate relationships within marketing strategies. I will then provide evidence of positive sponsorship agreements while justifying their implementation to ensure continued affiliations between sports managers and their partners. Lastly, I will formulate my own methods for sponsorship while explaining how implementation will result in a successful partnership with sponsors.
Sponsorships in Sports
Virtually every major collegiate and professional sporting event will feature some type of sponsorship. A sponsorship is a legal contract between a sport property and another entity exchanging something of value, whether cash or an in-kind service/product, wherein the sport property allows the sponsoring organization the rights to commercialization of its brand and the resulting benefits derived from these actions (Mowen & Graefe, 2002). Sponsorship in sports goes far beyond a company purchasing time to advertise its products, instead it includes naming rights for stadiums, events, and segments during broadcasts (Billings & Butterworth, 2021). These partnerships, consisting of sponsors, properties, and payments, have proven to be an excellent way for sport entities to increase revenue, enhance the consumer experience, and enhance brand image (Pedersen et al., 2021).
The first part of a successful sport sponsorship is a sponsor. A sponsor is the organization purchasing rights from the sport organization. This company may be a sport-oriented organization itself or may not be (Aicher et al., 2016 p. 181). An example of a sponsor would Continental Tire, who purchased the naming rights of the event referenced earlier from the event sponsor, bdG Sports (Duke-Zags sold out as Continental Tire secures naming rights, 2021).
The second part of a successful sport sponsorship is a property. A property is in reference to the sport sponsorship, the sport organization or entity being sponsored (Aicher et al., 2016). An example of a sports property that was sold to a sponsor would be the basketball game referenced earlier.
The final part of a successful sport sponsorship doesn’t involve a tangible organization or good, but rather a mutually beneficial union between two organizations (the sport organization and the prospective sponsor) that have compatible values and goals. A matchup hypothesis is often utilized to explain that the more congruent the relationship between the two organizations, the more effective the brands will connect in the minds of the consumers (Aicher et al., 2016). An example of this would Continental Tire sponsoring a racecar series, rather than a college basketball game, as tires are more closely related stock car racing than basketball.
Once a sports organization has screened its potential sponsors, a partnership can move forward under the direction of its organizational objectives. These objectives fall into two main categories: direct objectives and indirect objectives. A direct objective is a business and marketing action specifically crafted to drive immediate sales (Aicher et al., 2016). Conversely, an indirect object is an outcome other than achieving immediate gains, such as an increase of awareness to new markets and audiences (Aicher et al., 2016).
Lastly, after a sponsor and a sports organization have determined to be mutually beneficial and compatible, documentation and legal agreements must be created (Aicher et al., 2016). This legally binding documentation address areas such as the length of the sponsorship, the payment obligations of the sponsor, the type of capital exchanged, contingency plans resulting in termination of the sponsorship, and restrictions placed on the organization by the sponsor (Aicher et al., 2016).
Benefits of Sport Sponsorships
In 2014, USA Track & Field (USATF) entered into a sponsorship with the University of Phoenix (Pedersen et al., 2021). Through this partnership, USATF athletes were able to receive discounted courses through the University of Phoenix’s online catalogue, as many USATF athletes train full-time and are unable to attend traditional full-time college courses. Meanwhile, the University of Phoenix was able to build public awareness of the university, thus increasing its enrollment and profits (Pedersen et al., 2021).
There are many benefits of sport sponsorships. Some exist for marketing, advertising, and brand image reasons, while others are focused more on simple revenue generation or tangible benefits. The desired benefits of a sport sponsorship are tied closely to an organization’s direct and indirect objectives and the amount of sponsorship inventory available to potential sponsors. Sponsorship inventory is any place or location, whether physical or digital, that can be exchanged for something of value, such as cash or an in-kind service or product, with the purpose of a sponsoring organization being able to achieve its sponsorship activities (Aicher et al., 2016).
One type of payment an organization can receive from a sponsor is an in-kind payment. An in-kind payment is the exchange of something of value other than cash currency for the purpose of entertaining a business relationship between a sports property and a sponsoring company (Aicher et al., 2016, p. 182). An example of an in-kind payment would be a trade agreement, where an organization promotes or advertises a local restaurant at an event, with the restaurant (the sponsor) providing a certain amount of complimentary meal vouchers to athletes or members of the organization.
A specific kind of sponsorship agreement that has become increasingly popular and profitable for sports organizations is the selling of naming rights. Naming rights refer to a sponsor’s exclusive ownership of the name of the venue where sport events occur, such as the stadium or arena (Aicher et al., 2016). In 2002, Fresno State University sold the naming rights to its men’s and women’s basketball arena to Save Mart, who subsequently named the area the SaveMart Center. This agreement was worth $40 million over 20 years (Dosh, 2014). Likewise, in 2008, the University of Minnesota entered into a sponsorship agreement with TCF Bank for the naming rights to its football stadium for $35 million over 25 years (Dosh, 2014). A 2012 study by Chen & Zhang revealed significant influences of beliefs related to naming rights of a sports facility, including attitude toward commercialization, stadium identification, and perception of financial status on attitudes toward sponsor, and beliefs about naming rights sponsorships on willingness to attend sporting events. The importance of naming rights to prospective sponsors is furthered sustained by the recent purchase of the naming rights of the basketball arena formerly known as the Staples Center. Home to the NBA’s L.A. Lakers and L.A. Clippers, as well as the WNBA’s L.A. Sparks, starting on Christmas day 2021, the arena will be known as Crypto.com Arena, which the website purchased for $700 million over 20 years (ESPN, 2021).
Methods of Sport Sponsorship
Using the Southern Utah University Athletic Department as my example, I will assume the role of the Assistant Director of Corporate Sponsorships for this case study. Southern Utah University (SUU) is a small, rural campus, with only about 8,000 on-campus students. The varsity sports at SUU compete at the NCAA Division I level and compete in the Big Sky Conference. The majority of SUU’s athletic sponsors are regional businesses and local organizations. While these local organizations are extremely loyal, they have limited resources and very few new organizations ever move into the community.
At SUU, only the on-campus arena, which is home to the men’s and women’s basketball teams, the gymnastics team, and the volleyball team, has a deal for its naming rights. This leaves the naming rights for the football stadium, the softball field, and the soccer field available to be sold. Not having naming rights sold for the football stadium is leaving hundreds of thousands of dollars on the table. While the naming rights for the softball and soccer fields would not likely sell for much due to the small crowds these sports attract, they could still be sold or even included in the agreement for the football stadium naming rights.
The naming rights to the on-campus arena are owned by America First Credit Union. While I doubt they would be interested in purchasing additional naming rights, my first course of action would be meeting with them to gauge if they had any interests in our other properties. I would also meet with them to learn any leads on potential sponsors and ensure them that we wouldn’t reach out to any of their competitors. After meeting with America First Credit Union, I would seek out prominent regional organizations, similar in size to our other sponsor, to determine any interest in our football stadium naming rights.
An organization that the SUU Athletic Department has a previous relationship with that does not currently own naming rights is HintonBurdick CPAs and Advisors. This organization generates over $7 million in revenue annually and has multiple offices in Utah and Arizona, the two states where SUU football primarily recruits from. They have been an athletics sponsor for many years and even works closely with the university’s Master of Accountancy and CPA preparation programs. Do to the organization’s close relationship with both the university and the athletic department, its history donating to SUU Athletics and sponsoring athletic events, and the alumni who live in the geographical regions of the HintonBurdick offices, I believe this organization would be an ideal sponsor to purchase the naming rights of SUU’s football stadium.
References
Aicher, T. J., Newland, B. L., & Paule-Koba, A. L. (2016). Sport facility and event management. Jones & Bartlett Learning.
Billings, A. C., & Butterworth, M. L. (2021). Communication and sport: Surveying the field. SAGE.
Chen, K. K., & Zhang, J. J. (2012). To Name it or not Name it: Consumer Perspectives on Facility Naming Rights Sponsorship in Collegiate Athletics. Journal of Issues in Intercollegiate Athletics, 5, 119–148.
Dosh, K. (2014, December 02). Naming Rights Deals. Retrieved November 28, 2021, from Duke-Zags sold out as Continental Tire secures naming rights. (2021, July 1). Retrieved November 28, 2021, from http://continentaltirechallenge.com/duke-zags-sold-out/
ESPN News Services. (2021, November 17). Staples Center to become Crypto.com Arena in reported $700 million naming rights deal. Retrieved November 28, 2021, from https://www.espn.com/nba/story/_/id/32650662/staples-center-become-cryptocom-arena-rich-naming-rights-deal
Mowen, A., & Graefe, A. (2002) Public attitudes toward the corporate sponsorship of park agencies: The role of promotional activities and contractual conditions. Journal of Park and Recreation Administration, 20(2), 31-48.
Pedersen, P. M., Laucella, P. C., Kian, E. (., & Geurin, A. N. (2021). Strategic sport communication. Champaign, IL: Human Kinetics.
Hayden Coombs 