Sports Community Foundations and The Leverage Lie

I’ve worked with a number of corporate clients recently, as they’ve been negotiating major partnerships with teams and sportspeople. They have all embarked on these sponsorships backed by strong strategy and have been prepared to leverage the investments across their marketing and business channels.

Sounds good, right? On closer examination of the proposal, however, every one of them required an additional investment in the six-figures (sometimes well into the six figures) to sponsor the sports organisation’s community foundation. The properties called it “leverage”, but all they offered were a few logos on things, and not one was even remotely interested in customising the offer, so it delivered on the sponsor’s community objectives.

I have no problem with teams putting funds into their community programs. Clearly, this is good for the team and the community and the right thing to do. My problem is when teams and sportspeople provide a sponsorship proposal, get a sponsor on the hook, then try to bolt on this extra chunk of revenue, attempting to disguise it as a leverage opportunity. It’s not. It’s just a revenue grab – an attempt to get sponsors to fund a program that makes only the sports organisation look like a hero.

And let’s not forget that any company big enough to be taking on a major sporting sponsorship is likely to have their own community program – meeting the needs of their customers and communities in a way that is right for their brand. In that case, what’s better, spending $350,000 for a bit of visibility on a team’s community program, or spending $350,000 to extend and amplify your own community program? I know what I’d do.

So, what’s the answer? I believe sporting organisations should just name a figure – whatever figure they think is fair for the whole compliment of strategic, customised benefits they are providing. That way, a sponsor can make a strategic marketing decision about the best use of their marketing funds, not be mentally dividing it into “the strategic part” and “the non-strategic part”. It would be a straight cost-benefit analysis.

If sporting organisations want to derive some community revenue from their sponsors,  they really need to raise their games (pun intended). They could…

  • Shunt some of the money into the foundation. If they’ve done a good job of offering creative, strategic benefits, the value of the sponsorships will rise and there should be plenty of profit to accommodate some of the revenue going into that program.
  • Incorporate some community benefits into the overall sponsorship offer, ensuring that those benefits have strategic value to the sponsor. This means no more hitting up sponsors to fund a program that has virtually nothing to do with them.
  • Encourage sponsors to develop leverage programs that have a fundraising spin, with the money raised going to the foundation.
  • Work closely with the sponsor’s community sponsorship team to develop mutually beneficial programs. This would include integrating the team’s community work with some of the sponsor’s, and vice-versa.

For sponsors faced with this kind of proposal from an organisation you really want to sponsor, you can do two things:

  1. Make your community agenda clear to the property, and try to work with them to develop a community angle to the sponsorship that works for both parties and your target markets.
  2. If that doesn’t work, you need to consider the community part of the investment just a cost of doing business with that organisation. Stop trying to justify the cost against a feeble set of benefits that don’t provide value. Instead, just add that figure to the overall sponsorship cost and make your decision about the sponsorship based on the total required investment. It’s really all you can do.

© Kim Skildum-Reid. All rights reserved. For republishing information see Blog and White Paper Reprints.

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