Opportunities With Emerging And Second-Tier Sports

It's a strange era for sports marketing -- one where, for the time being at least, many major sports sponsorships are losing their appeal. Empty corporate seats at the new Yankee Stadium and Wachovia/Wells Fargo paying over $6 million to sponsor a PGA Tour tournament and then removing its name from it entirely are just two notable examples.

In other cases it's simply too expensive, especially with the "major" leagues -- NBA, MLB, PGA Tour, NASCAR, and the NFL. For those properties, sponsorship and related activation can easily cost several million per year, with mandatory multiple-year commitments.

However, the proven, fundamental benefits of sports sponsorship remain. It's a compelling way to associate a brand with an affinity or lifestyle and leverage that relationship to connect with fans -- an opportunity to make connections through existing interests and affinities where they invest time, money, and passion.

Bank of America recently told Sports Business Journal that for every dollar it spends on sponsorships, $10 in revenue and $3 in net earnings are generated. FedEx spends over $25 million annually on the PGA Tour, NFL and auto racing, and sees multiple returns on its brand awareness, favorability, and overall investment. But, recently, fewer companies are willing, or able, to make the investment necessary for major sports properties.

Yet, there still are excellent opportunities and surprising value available to marketers. The time is right to take a closer look at emerging and traditionally second-tier sports. What constitutes an emerging or second-tier sport varies depending on who's selling, and who's buying. But for the sake of discussion, assume it includes such diverse properties such as Women's Professional Soccer, Mavericks Surf, Major League Lacrosse, the LPGA, and Minor League Baseball, among dozens of similar opportunities.

These properties have a compelling list of benefits, which are especially relevant and opportunistic in the current economic environment:

  • Far lower cost of entry. Sponsorship investment can typically be anywhere from 50% - 90% lower than the big six (NFL, MLB, NHL, NBA, NASCAR, PGA Tour), reason alone to consider new properties.
  • Greater contractual flexibility. Emerging and smaller properties tend to be much more flexible and accommodating in terms of contract duration, terms, and even barter opportunities. There are advantages to not being one of dozens of sponsors of a big league; the flexibility associated with emerging properties is certainly one of them.
  • Less corporate clutter. It's far easier to have an impact and increase your brand presence among fewer sponsors and typically lower activation spending. NASCAR has over 50 corporate sponsors -- good luck standing out in that crowd.
  • Better support. Generally, emerging sports are hungrier for corporate funding, and spend more time and effort working with partners to ensure sponsorship success, compared to many major sports. It's a great advantage of being a bigger fish in a smaller pond.
  • Greatly reduced PR "risk." The risk of concern over corporate waste or excessive spending is relatively low relative to the lower costs and visibility of emerging sports. While many major sports' sponsorships are coming under increasing scrutiny, second-tier sports are often perceived as smart grass roots marketing, rather than flashy, lavish spending.

There are certainly tradeoffs to consider, including smaller fan bases and reduced media exposure. But we feel strongly that the benefits of emerging sports are substantial, and the potential ROI is huge. Personally, we're paying close attention to the LPGA and AVP professional volleyball tour -- both are great values with expanding media exposure.

There are literally dozens of properties that are worth a closer look, and the time is right to take advantage of these opportunities.

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10 comments about "Opportunities With Emerging And Second-Tier Sports ".
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  1. Gerard Mclean from Rivershark, Inc., May 26, 2009 at 11:21 a.m.

    Let's also not forget youth sports which are locally focused and far more accessible. for the soccer tournament world.

  2. Jonathan Bailey from Bailey Gardiner, May 26, 2009 at 12:17 p.m.

    Hey, don't forget horseracing. Successful tracks like Del Mar and Churchill Downs offer very competitive sponsorship packages and the chance to get in front of millions of consumers. Plus the sport is primed for new audience opportunities.

    Jonathan Bailey

  3. Sean Bartlett from Lowe's, May 26, 2009 at 12:35 p.m.

    I don't know about "second tier", but Ironman events provide a great opportunity for sponsors. Average HHI of participants is $161,000 and thousands of spectators spend 10-17 hours at the race with not much to do as they only see their friend or family member go by every few hours.

  4. Monica Bower from TERiX Computer Service, May 26, 2009 at 1:14 p.m.

    Excellent article with a common-sense perspective that's nevertheless easily overlooked; as a rule the venues and organizations at this level do very little to effectively market themselves to advertisers who could derive value from them, unlike larger organizations that are almost distastefully filthy with sponsorship opportunity marketing.

    Local advertising is suffering from a general consumer disengagement from a number of local advertising placement standbys, namely newspaper, radio and local tv that are each being separately hammered in the current economy. this creates an atmosphere where local advertisers need to find other ways to promote their businesses besides the methods on the wane, and where local or regional market sports teams and organizations are getting less and less for their advertising dollar on those waning media and are more open to cutting sponsorship deals as well as creative local co-branding initiatives.

  5. Shaun Pope from XOS Digital, May 26, 2009 at 3:49 p.m.

    Great article, Jon! However, there’s another opportunity associated with emerging and second-tier sports that you haven’t mentioned, and this opportunity is in sponsoring/building online communities. The great thing about sports is that people get so passionate about it. There are thousands of blogs, social networks and online video channels dedicated to sports and athletic teams. Brands should leverage these communities of passionate fans by becoming active members. Not only can advertisers and sponsors use banner and video advertisement to get their messages across. They can also sponsor entire communities, support content production or create their own videos, pictures and written web content around sports.

    More on sports marketing on our blog:

  6. Bob Shavelson from integrated marketing solutions, May 26, 2009 at 5:07 p.m.

    I'm not sure Tennis is a "second tier" sport but, you seem to have overlooked The Tennis Channel. Over 2,650 hours of match play including the Grand Slams! All the celebrities, great play and a VERY cost effective buy. They're even streaming the French Open live!

  7. Suzanne Lainson from SportsTrust, May 26, 2009 at 6:10 p.m.

    There is strong loyalty to sponsors of (1) community events where families are very grateful for the support and (2) niche sports where fans pay very close attention to which sponsors are involved. In these difficult economic times, think in terms of how your sponsorship will benefit fans, communities, and up-and-coming athletes who fans can identify with.

  8. Shirley Edbrooke from The Edbraham Group, LLC, May 27, 2009 at 8:47 a.m.

    I'd be curious to know what the value/return would be for more serious corporate sponsorship of youth programs. Building brand awareness and loyalty at the family and community level seems to be a worthwhile investment.

  9. paul myers, June 9, 2009 at 1:13 p.m.

    Action Sports and especially Supercross are the best bang for your buck! Supercross is a cycle racing sport involving racing specialized high performance off-road motorcycles on an artificially made dirt tracks consisting of steep jumps and obstacles.

    "It’s the second most popular motor sport in the country, with only NASCAR racing attracting more fans. It’s known for speed, big air and combat-like intensity." -- CBS News - 60 Minutes

    Supercross sponsorships average about 10% of what a comparable sponsorship would cost in NASCAR. Yet, you get the same, if not greater, event presence. The events sell out major MLB and NFL stadiums - regularly attracting more fans than the regular home team. The average age is much younger than traditional sports - especially NASCAR - so the lifetime value of the customer is much greater.

    Plus, the opportunity to activate your sponsorship is much bigger and far less expensive than other major sports!

    Brands looking to connect with a more affluent and much younger audience should learn more about Supercross!

    While you're at it, check out all other action sports and see why more kids own skateboards in the US than baseball bats!!

  10. neil jones, June 10, 2009 at 11:39 a.m.

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