(Statement by Todd Deacon, General Manager, Sweeney Sports)
The sponsorship industry is suffering because of the global economic crisis. Corporate sponsors generally have cut back on sponsorship activities, or are considering it – and rights holders are having a tough time signing new deals.
A survey of corporate sponsors, rights holders, sponsorship consultants and athletes and talent managers has shown the troubling trend. The survey was conducted by Sweeney Sports, widely recognised as Australia’s leading sports and sports sponsorship research company. The survey questioned 295 people in the industry, including almost all major sponsors and rights holders.
The survey shows that already:
• almost one of every three (27%) corporate sponsors have quit existing sponsorship as a result of the crisis
• one third (31%) have cut funding for existing sponsorships
• almost half (48%) have put a hold on signing new sponsorships.
• only slightly fewer than one of every four (23%) say the crisis has had no impact on their sponsorship activities.
And the situation is likely to get tougher with:
• almost one of every three (27%) of corporate sponsors saying they will exit existing sponsorships in 2009
• almost half (47%) saying they will cut funding for existing sponsorships
• six of every ten (62%) will put a hold on new sponsorships.
As a result, rights holders are saying that corporate sponsors are more elusive and engaging in tougher deals:
• almost one of every seven (67%) say signing sponsors has been more difficult since the crisis began
• almost one of every three of every ten (27%) say sponsors have insisted on shorter term contracts
• more than four of every ten (43%) say sponsors are discussing reduced commitments to existing contracts
• one of every ten (9%) say sponsors have quit existing contracts before the end of their agreed terms
• but - a quarter (25%) say the crisis has had no impact yet on their sponsorship portfolios and deals with corporate sponsors.
Despite this gloom, rights holders surprisingly are more optimistic than pessimistic about the next 12 months:
• a third (34%) say they are expecting an increase in sponsorship income
• fewer than one of every three (27%) expecting decreases.
In the overall marketing picture, sponsorship is comparatively protected:
• a net 24% of corporate sponsors are forecasting a decline in sponsorship budgets (46% forecasting a decrease and 22% an increase)
• a net 33% are forecasting a decline in advertising media budgets (45%, 12%)
• a net 42% are forecasting a decline in their overall marketing budgets 53%, 11%).
Hardest hit by far in the sponsorship area will be sports sponsorship, largely a reflection of its dominant share of the total sponsorship industry.
The proportions of sponsors planning cutbacks are:
• sports sponsorship - almost eight of every ten (78%)
• charity and community sponsorship - more than one of every five (22%)
• arts - about one of every six (17%).
To read more about this press release please download the PDF by clicking on the link below.
If you would like a free copy of the entire report please contact Todd Deacon on todd.deacon@sweeneyresearch.com.au
