THINKPIECE: When sports executives overdo it with corporate sponsorships, they hurt more than brand equity

When sports franchise executives convene in virtual boardrooms to discuss corporate sponsorship packages, the conventional dialogue revolves around quantity, not quality. Large-market franchises are inundated with requests for sponsorships, but they fail to satisfy clients.

When sports franchise executives convene in virtual boardrooms to discuss corporate sponsorship packages, the conventional dialogue revolves around quantity, not quality. Large-market franchises are inundated with requests for sponsorships, but they fail to satisfy clients.

When sports franchise executives convene in virtual boardrooms to

discuss corporate sponsorship packages, the conventional dialogue

revolves around quantity, not quality. Large-market franchises are

inundated with requests for sponsorships, but they fail to satisfy

clients.



While executives fail to give sponsors the biggest bang for their buck,

corporate constituencies grow tired of diminishing returns. These

incipient rifts in the franchise-sponsor relationship reflect a

condition of frenzy-feeding in a depleted reservoir. Simply put, there

are too many corporate sponsors in each team’s Rolodex.



As more sponsors become disillusioned with their affiliations in sports,

franchises are eroding their economic base through a blatant disregard

for brand equity. Sadly, an emerging trend within front offices suggests

that owners equate corporate relations with collecting fees.



Indeed, there is more to this relationship than short-term financial

incentives. These ventures set precedence for an image that both the

franchise and its sponsors are trying to portray. Sponsorships, properly

positioned, can create immense value for both parties.



The crux of this problem is the team executives’ unwillingness to

understand the need for fewer clients, with more attention paid to

each.



Although this notion may bring to mind the quixotic Jerry Maguire, there

is a critical issue at stake: most franchises lack the structural

capacity to sustain multi-client satisfaction in the long run.



Franchise owners, by not equipping their front offices with ample

capacity, face an uphill battle in pleasing sponsors with a rewarding

return on investment. Most corporate benefactors are skeptical when

entering the first year of a contract and lukewarm when reaching closure

of it. Yet, corporate wealth continues to soak the sports entertainment

industry with exorbitant prowess. If there is any explanation to this

paradox, it is that owners manage their franchises disproportionately to

comparable business operations. Corporate sponsors feel perplexed and

short-changed while owners remain heedless and indifferent.



There is a reason why companies such as Coca-Cola, Visa and Eastman

Kodak have reevaluated their presence in the sports community. They are

sending a message to owners: ’You need us more than we need you.’



If owners don’t heed this warning, then they will have ambushed their

own bargaining power. But if they are willing to cultivate higher

quality in their sponsorships, they can keep the upper hand. But it all

appears contingent on the macroeconomic decisions made in those virtual

boardrooms.



Michael Wissot is a business and political consultant in Southern

California.



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