Sports sponsorships, which took a financial hit during the recession as marketers looked for easy ways to cut budgets, are rebounding strongly. A new report from PricewaterhouseCoopers predicts that globally, sponsorships will grow faster than any other sector of the sports marketplace in the next few years, overtaking gate receipts as the largest revenue segment by 2015.
For the five-year period through 2015, sports sponsorships will grow at an annual rate of 5.3% to a total of $45.3 billion. By comparison, gate revenues will grow just 2.5% per year during the same period to reach just over $44.7 billion. Media rights fees will grow at an annual clip of 3.8% to more than $35.2 billion, while merchandising revenue will grow annually at about 2.6% to just over $20 billion.
PwC predicts that total sports market revenues will grow 3.7% annually from 2011 through 2015 to more than $145.3 billion. By then, sports sponsorships will account for about 31% of the total pie, up from about 29% today.
“Sports market sponsorship will be a key engine for growth in total revenues over the period,” the report states. By region, sponsorship growth will be highest in North America, with an estimated annual growth rate of 6.1%. Between 2011 and 2015, North American sponsorship revenue will climb from roughly $12.5 billion to nearly $16 billion, per PwC.
Sponsorships are no longer just about maximizing visibility and awareness of brands, the PwC report states. They’re now also about “gaining deeper and more emotional engagement with fans, staff, and even managing the perception of the sponsoring company.” As an example, the report cited fast-food chain McDonald’s bid to associate itself with fitness and “balanced eating” by signing Olympic star Darra Torres for its campaign leading up to the 2012 Olympics.
Increasingly, sponsors are linking their social media efforts with their involvement with sports, per PwC. One example: Italian appliance maker Indesit launched a community hub site for its sponsorship of four European soccer teams, PwC noted. “Building on a social networking base, companies can use data mining to help them develop content that is relevant to each platform and each consumer segment.”
The PwC report was issued at the end of a year when ad agencies were busy building their sports marketing assets in anticipation of forecasted growth. MDC Partners and race car team sponsor (and retired racer) Michael Andretti recently formed Andretti Sports Marketing, headquartered in Indianapolis.
In August, Havas Sports & Entertainment, a unit of the Paris-based Havas, ramped up the sports part of its offering in the U.S. with the hiring of Mark Rothenberg, who was named to the new post of senior vice president for sports. GroupM's MediaCom unveiled a new unit, MediaCom Sport, and hired IMG veteran Marcus John to run it. Other agencies have had sports marketing units in place for a while.