Friday, April 12, 2013

Is Referee Sponsorship a Good Call?

Is there any space in sports that should be considered a sponsor-free zone? Corporate names and logos are on venue walls, in concourses, on signage in seating areas, on the field of play, and even on uniforms. About the only object that has not had a logo slapped on it is the ball or puck (although they bear logos of their manufacturers). One space that has been mostly commercial-free has been the referee uniform. It stands to reason- one of the primary motivations to engage in sponsorship is for a sponsor to experience image transfer from the sport brand to its brand. Unlike teams and athletes, game officials do not evoke positive associations that a sponsor would want transferred to its brand. So, referee sponsorship would be a bad call for a company to make, right? The answer is "it depends."

A Good Value
The question of whether referee sponsorship is effective is not new, but it surfaced again this week when the Barclays Premier League indicated it was looking to sign a new referee sponsorship deal after its current agreement with Expedia ends this summer. The estimated rights fees of $1.5 million per year is a significant investment, but it is a fraction of what sponsors pay for rights to jersey sponsorships for top Premier League clubs. Aon has been the jersey sponsor of Manchester United since 2009 at an average annual cost of nearly $60 million. Most Premier League clubs fetch a much smaller percentage in jersey sponsorship rights fees than Man U but still are a great deal higher than the $1.5 million it would cost to be a referee sponsor. Moreover, the exposure a Premier League referee sponsor would receive is staggering. It is estimated that the reach of Premier League matches is 700 million homes globally. The cost per person reached via Premier League referee sponsorship would be incredibly low.

A Good Call?
A strong case can be made for the value of a referee sponsorship deal when compared to rights fees paid to associate with a team. And, the reach of top properties like the Barclays Premier League makes referee sponsorship an appealing proposition for brands with broad geographic reach. However, referee sponsorship is not going to be an appropriate association for all brands. Here are three considerations:

  1. What are the brand building needs? If brand awareness is a sponsor's objective, referee sponsorship represents a means for creating brand exposure at a much lower cost than being a team jersey sponsor. If shaping brand image is a primary objective, sponsoring referees will likely not have the same potential for triggering image transfer as team sponsorship.
  2. What is audience sentiment toward sponsorship? Some sports are more sponsor-dependent than others; sponsorship rights fees can be a crucial revenue stream to support operations. But, for sport properties for which referee sponsorship rights fees would be "gravy" on existing rich revenue streams the presence of referee sponsorship might be viewed with indifference at best or even cynicism.
  3. How can sponsorship be activated? The exposure benefit of a property with extensive reach like the Premier League is great, but the engine that drives a sponsorship is activation. What types of activation are permissible? A referee sponsor must commit to investing beyond rights fees to market its association.
The Barclays Premier League should have little difficulty securing a new referee sponsorship; it is one of the hottest sports properties in the world. What companies or brands do you see as prospective candidates to replace Expedia? What criteria should the seller (Premier League) use to select its next referee sponsor?

WSJ.com - "Referee Sponsorship Up for Grabs" 


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