Today, sports and sponsorship seem to go hand-in-hand. From your local rec leagues to professional-level operations, sponsorships play an integral role in the modern sports industry, offering mutual benefits for both brands and sports entities alike.
Of course, sponsorship hasn’t always been so integrated in sports. Instead, the landscape has evolved gradually over time. With a better understanding of the history of sports sponsorship, the different types of sponsorship that are most common today, and the impact of digital media on sports sponsorship, you can advance your knowledge of sports leadership to the next level.
What Is Sports Sponsorship?
Before delving any deeper into the history of sponsorship for sports or the different types of sports sponsorship, it can be helpful to understand what sponsorship for sports is and what it entails.
In simplest terms, a sports sponsorship refers to an exchange of value between a brand (sponsor) and a sports entity (such as an athlete, team league, or special event). It is a common misunderstanding that sponsorship is a form of advertising. In reality, sponsorships do not take on the form of advertisements because they do not directly aim to sell products or services. Instead, sponsorship for brands is more about creating a positive brand image through association with a sport or sport entity.
Key Objectives of Sports Sponsorship
The objectives or goals of a sports sponsorship can vary based on the type of sponsorship and other factors. In general, however, all sponsorships exist with the end goal of boosting awareness and image for the company providing the funding for the sport entity. In some ways, sports sponsorship can be effective as a form of marketing because it can increase exposure and media coverage, which may allow the brand to reach a wider audience.
Brands may also invest in sports sponsorships to engage with their target audiences, associate with positive values, and build brand awareness.
In exchange, sporting teams, athletes, or other entities may benefit from these sponsorships because the funding provided may offer new networking opportunities, allow for the purchase of new equipment, improve facilities, and more.
The History and Evolution of Sports Sponsorship
While it may be difficult to imagine sports without heavy sponsorship involvement today, this hasn’t always been the case. Instead, sponsorship in sports is a relatively recent development with key milestones and trends that have shaped the industry throughout the years. Let’s dive into some of the best sport sponsorship examples:
Early Forms of Sports Sponsorship
Some of the earliest forms of sports sponsorship first emerged during the late 19th and early 20th centuries, as the industry saw a significant rise in the popularity of professional sports. During this time, alcohol and tobacco brands maintained a heavy presence in the sponsorship space. By 1928, Coca-Cola began its first partnership with the Olympics. This partnership has persevered through present-day, making the Coca-Cola/Olympic sponsorship perhaps one of the best sports sponsorship examples of all time.
By the mid-1900s, sponsorships and endorsements in sports began to take off even more as film and television celebrities started to get involved in the space. Meanwhile, as teams and franchises began building their own facilities (arenas, stadiums, etc.), brands even began to offer funding and endorsements in exchange for naming rights. This is precisely how Wrigley Field, home of the Chicago Cubs, got its name way back in 1927.
The Rise of Television and Social Media
As television and mass media became more widespread throughout the 20th century, sports sponsorships created new opportunities for brand exposure and audience reach. With the rise of the digital age toward the end of the 20th century, social media and the internet created even more exciting and promising avenues for fan engagement, targeted advertising, and data-driven marketing strategies.
Types of Sports Sponsorships
There are several different types of sports sponsorships, each with its own specific characteristics and goals. Learn more about each type of sponsorship below:
- Team sponsorships – In a team sponsorship, businesses pay a fee in exchange for their logo and/or namesake to be displayed on team uniforms, equipment, facilities, marketing materials, and elsewhere as agreed upon in the contract. This type of sponsorship is extremely common at all levels of sports, from amateur to collegiate and professional. In some cases, it may be possible for a team to have multiple sponsors. However, the number of sponsors and the specifics of the agreement will vary from one team (and one sponsorship contract) to the next. It is not uncommon, for instance, to display one sponsor’s name more prominently if the company has made a larger financial contribution to the team.
- Athlete sponsorships – Although slightly less common than sporting team sponsorships, individual athlete sponsorships are still relatively common in the sporting industry. Specifically, athlete sponsorships occur when a brand pays a fee directly to an athlete in exchange for having their brand associated with that professional. The athlete, for instance, may exclusively use that company’s equipment or may appear in advertising campaigns for the company itself. Nike is an example of a brand that has done plenty of sponsorship and endorsement deals with prominent athletes ranging from Tiger Woods to Michael Jordan. Plus, now that college athletes can legally sign endorsement deals, the opportunities for athletes and brands to engage in sponsorships are greater than ever.
- Venue sponsorships – In a venue sponsorship, a company (or several companies) may make a financial investment in a stadium, arena, or other sports facility. This deal may occur during the early phases of design and construction of a new athletic venue, or it can take place after the facility is already open for business. Regardless, venue sponsorships can be a great way for brands to get their names and logos displayed throughout event venues. In some cases, these deals may include mentions of the sponsoring brand on advertising campaigns and other forms of media as well. It is also not unheard of for an entire stadium or arena to be named after a sponsoring brand, as is the case with Little Caesars Arena (home of the Detroit Red Wings).
- Product sponsorships – Another common form of sports sponsorship is the product sponsorship, where a specific brand’s product becomes the “official” product of a sports team or even an entire league. With this type of sponsorship, the brand pays the team or league an agreed upon amount in exchange for exclusivity in this regard. For example, Bud Light has been considered the “Official Beer Sponsor of the NFL” for nearly three decades now. These kinds of sponsorships can be especially effective in boosting brand image while connecting businesses with customers.
How Sports Sponsorships Influence the Sports Industry
Although it’s easy to see how sponsorships can benefit the brands involved, it’s also important to consider the impact of these sponsorships on sport entities. From individual athletes to teams and entire leagues, sponsorships can offer valuable financial support, build brands, and engage fans.
Financial Support and Revenue Generation
When brands offer funding and financial support to athletes and teams, these sport entities can invest in the resources they need to further their talent. For instance, the revenue generated by a sports sponsorship could be enough to build a much-needed new facility, invest in athletic training, and otherwise develop talent in ways that might not have been possible otherwise.
Sponsorship can be especially helpful for smaller leagues and organizations that may not have a lot of funding, especially at the non-professional level. With the right financial support and revenue generation, athletes can focus more on improving their skills and worry less about raising funds to meet their goals.
Brand Building and Marketing
For the companies that offer funding and sponsorships for sport entities, there is also the benefit of being able to build brand awareness while enhancing the overall image of the brand to the average viewer. When a sports fan sees a brand sponsor on an athlete’s jersey or in a sports arena, they may be more likely to recall that brand with a positive association later on. This serves as an effective marketing strategy that can not only enhance company image, but possibly drive sales in the process.
Fan Engagement and Community Building
Last but not least, sponsorships can create unique opportunities for fan engagement and community building through special events, contests, and social media campaigns. For example, it is a relatively common practice for McDonald’s to offer a free order of its famous McNuggets in certain cities when the home football team records a sack during a game. These kinds of giveaways and other special promotions can be a great way to get fans more excited and engaged in the sport. At the same time, brands can spread awareness of their own products and services while building a positive image. It’s a win-win for everybody involved!
Ready to Learn More?
Today’s sporting industry leaders need to have a robust understanding of how sports sponsorships work and how to secure them, when needed, to advance organizational objectives and support strategic initiatives. If you’re interested in learning more about sports sponsorship or any other area of sports leadership, Johnson & Wales University’s Master of Business Administration in Sport Leadership program may be right for you.
This program is offered online for your convenience and covers relevant sports leadership topics including sports sponsorship, global issues in sports leadership, effective communication strategies, and strategic marketing.
For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].