19 Sep 2008
Doom and gloom in the financial markets is making everyone look over their shoulder but Peter Thomas, marketing & communications director at Accenture UK and Ireland, finds reasons to be optimistic.
It has been a momentous week in the corporate world by any measure and one that will have given sponsorship managers and agencies across the UK pause for thought and which has probably led to frantic scanning of their little black books.
Was it only a week ago that West Ham United took to the field in shirts where the sponsor’s logo had been rapidly covered up?
And is it only five days since the news about Lehman Brothers brought the credit crunch into sharp focus with one possible outcome being that the Varsity Match at Twickenham in November could go ahead without a sponsor in place for the first time in over thirty years?
The question is how worried should they be? When markets are challenging it always leads to consolidation and M&A and that in turn can throw sponsorship strategies into doubt.
So what will happen this time? I think it’s too soon to tell what the long term impact will be on sponsorship and let’s not forget there was some good news this week with AEGON, a financial services firm that appears to have side-stepped the worst of the credit crunch, announcing a deal with the LTA to invest £25m in the increasingly bright future of British Tennis over the next five years.
Clearly the relative exposure of sponsors to the volatility of the credit market will be a key factor in shaping the sponsorship industry in the coming months and at the top of any rights holder’s wish list for new sponsors will be those with no exposure whatsoever – the elusive cash buyers.
In November, golf’s European Tour rebrands its Order of Merit as the Race to Dubai as part of its $100m plus deal with Dubai-based firm Leisurecorp. By signing a deal of such magnitude with the investment arm of the Dubai government, it has become particularly well-insulated against the vagaries of the marketplace and English football is also benefiting from the same sources but not all will be so lucky.
It’s a truism though that tough market conditions force a greater degree of scrutiny and creative thinking that growth markets sometimes do not. The credit crunch should force rights owners to look even more closely at how they can align their properties with sponsors’ business objectives and go beyond just cash investments as over the longer term that sort of alignment should be where sponsorship goes.
For a number of years, we have adopted an approach to sponsorship that we term Intelligent Funding, meaning we match our cash investment with an equivalent commitment in the form of our consultants’ time.
Their expertise adds value to the core business of the rights holder, whether this is the Royal Yachting Association or the National Theatre, while we are able to engage both our business and internal audiences in a more effective way than we could have done through a sponsorship constructed purely around brand exposure and hospitality opportunities.
The jury is still out on the extent to which the present situation will impact the sports sponsorship industry but I do believe it could be the catalyst to a new, more flexible era of partnership.
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