Maybe you heard that, over the next five years, Spotify is set to pay FC Barcelona $384 million (that’s $77 million per year, kids) to have the brand’s name featured on the front of the iconic football club’s shirts. No matter how you pronounce Barça, that’s a lot of pesetas.

Spotify isn’t the only brand throwing money at sports teams. One estimate pegs the value of sports sponsorships in 2021 at around $65 billion worldwide—a staggering total that is expected to exceed $112 billion by 2030. (The U.S. accounts for around 25% of that total, in case you’re wondering.) Non-sports fans will look at those numbers in bemused disbelief; but even the most hardcore fanatic must see the sponsorship frenzy and wonder (at least a little bit):

Is it really worth it?

Let's Talk About Sports Sponsorships

Before we go any further, perhaps we should pause to define what we mean when we refer to “sports sponsorships.” For our purposes here, it’s when any company chooses to explicitly associate its brand with a sports team or venue. In its most basic form, a “sponsorship” can be as simple as running an ad during a game. But more to the present point, when you plaster your corporate catch-phrase on the wall at Angel Stadium, or spray your logo across the netting behind the goalposts during a college football game, or sign on as the official donut of the NHL (yes, that’s a thing), that’s a sports sponsorship too.

What can be frustrating to any marketing executive considering a sponsorship opportunity is the difficulty of calculating its value and measuring its impact. Here’s a simple illustration: If you buy that space on the leftfield wall at Angel Stadium, you can do some quick math to calculate its base “value.” You know: (X number of fans in the stadium) + (However many times on average your logo shows up in the background during a broadcast) x (So many games) = Your potential reach. Something like that. But in a season-defining moment when Mike Trout climbs halfway up your logo to make a game-saving catch, it’s likely to get replayed on SportsCenter, tweeted and retweeted however many times, turned into memes, posters and (who knows?) maybe even magazine covers and wall calendars. What’s all of that worth? The math can get away from you in a hurry.

While the math can be tricky, what this familiar example illustrates is what can make a sports sponsorship so compelling. When you have the good fortune to align your brand with a magical moment, you become part of that moment. When the team wins, you win too. The impact on fans is immeasurable, and it creates the chance to build an emotional connection with those fans that would be hard to replicate through other forms of marketing.

In other words, Spotify can try to put a price on the exposure they’ll get from having their name on the front of FC Barcelona’s kit; and maybe they can do some SWAG math on the added value of having that name emblazoned across the chests of X thousands of Barça fans around the world; but what of the beating hearts behind those logos, especially if the team ends up winning La Liga, or better yet, the UEFA Champions League? You can’t put a price on that.

What Else Is In It for Me? 

If you can’t tell, we believe that sports sponsorships are about a lot more than just CPMs. There are a number of other factors that go into calculating what a sponsorship might be worth to your brand. Consider:

Brand Lift

How much equity can your brand actually accrue from its association with a team in the Association? When you sponsor the hot team with the popular uniforms, how much cool sticks to you as well? Does watching the Blackhawks play in the United Center make Chicago fans more likely to fly the Friendly Skies?

According to one study we read, the answer is a definitive YES. CivicScience says: “United Airlines sees around a 14% brand lift among fans of the Chicago Blackhawks, insinuating that fans of the Blackhawks seem to value United more highly.”

Community Relations

Like a Brand Lift turbocharger, sponsorships give your brand an immediate connection to the community that supports the team or league. “Any fan of my team is a friend of mine,” as the saying goes. That connection can establish a bond that extends beyond the length of the sponsorship even. Recently, Acrisure replaced Heinz as the title sponsor of the Pittsburgh Steelers’ home stadium, ending a 20-year association with the brand. When the change was announced, fans and players were outraged, primarily because over the course of two decades Heinz has become synonymous with Pittsburgh.

Goodwill

Invariably, sponsorship comes with added perks unavailable to the average fan: a luxury suite perhaps, preferred tickets for sure, access to stars and coaches from time to time. Those benefits aren’t free, of course, but you may struggle to quantify all of the ways that sharing them can enhance your relationships with clients and partners—not to mention what it can do for employees and others in your circles of influence. Even just knowing that your company is a lead sponsor for a team can provide some psychic benefit for franchisees and employees who care about these things.

Sales

When done right, the accumulation of the benefits already mentioned can start to show up where it matters most. A recent study by Nielsen concluded that only recommendations from people and branded websites rank higher than sports sponsorships in consumer trust. Why does that matter? Because another study Nielsen found that sponsorships triggered a 10% lift in purchase intent among fans.

So, What Should You Do About It?

If you are considering a sports partnership for your brand, here are some questions to ask as you assess the opportunity:

• Are you prepared for a long-term commitment? If your primary motivation for sponsoring a team is to boost sales next month, you might want to choose a different tactic. Truth is, the most successful sports sponsorships have been around a long time. (Chevy has been tied to major league baseball since 2005, for instance. Slazenger has been the Official Ball of Wimbledon since—wait for it—1902!) As with just about any form of marketing, sustained, consistent support accrues benefit over time. A sports sponsorship can be an important part of a marketing mix, but your KPIs for that sponsorship should not be the same as they might be for, say, a summer sales event.
• Does the opportunity fit your brand? Some sport/sponsor partnerships seem like natural pairings—racing and cars, golf and financial planning, football and beer. Others, not so much. Nickelodeon’s sponsorship of NASCAR in 2015 still leaves race fans scratching their heads. In an effort to reach out to younger audiences, someone thought it was a great idea to rename the NASCAR Sprint series the SpongeBob SquarePants 400—but maybe not your average (58-year-old) NASCAR fan. That doesn’t mean that an unusual partnership cannot grow into something meaningful over time, but if you want to stretch the brand, you may have to be prepared for some pushback at the outset.
• Is it something you can build on? Done right, a sponsorship can serve as a springboard for a broad array of marketing and promotions. For example, our client Kia began sponsoring the NBA in 2008. Since then, the brand has broadened its association with basketball by sponsoring 13 individual teams, the NBA draft, and a major portion of the NBA All-Star Game. Similarly, Dr Pepper has expanded its marketing horizontally in an effort to become synonymous with college football. The more seamlessly and effectively you can integrate the sponsorship into the rest of your marketing plan, the better.
• Can you afford it? Sports sponsorships don’t come cheap. As with any tactical choice in marketing, before you sign that long-term contract, have a clear understanding of what you might be forgoing in the process. Will there be money left over for that summer sales event?
• How are you at picking winners? Good teams draw more fans, get more and better press coverage, play more high-profile games, and, when they win championships, become embedded in the consciousness of even non-sports fans. You never can know for sure (just ask Brooklyn Nets fans), but get it right and your brand can win big. For instance, in one magical, 12-month stretch beginning in February 2021, our client Hyundai sponsored both Super Bowl winners (Tampa Bay Buccaneers and Los Angeles Rams) and the World Series champs (Atlanta Braves). Not bad, right?
• How do you feel about a little value ambiguity? Sports sponsorships typically come at a premium, and, as we’ve said, their full value may be hard to quantify to the CFO’s complete satisfaction. It won’t keep media professionals like us from trying to do the math as precisely as possible, but in the end, you may have no choice but to include at least one unknown variable in your algorithm. The bottom line is that you may not ever really know what the bottom line is on this one. Are you cool with that?

We’ll close with this final word of advice: The fact that for over a decade, Werner has been the Official Ladder of the NCAA Basketball Tournament should remind all of us that, when it comes to sports and sports teams, everything is for sale. If you see a sponsorship opportunity you want, go for it; and if you get it, use it to its fullest potential.

In the end, sports sponsorships are about creating an emotional connection with fans and tapping into their collective passion to the benefit of your brand. And once you get that insider’s position, you must leverage it for all its worth.

Go, team!

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