Much like the economy, ask any number of experts about the state of sponsorship in sport and you’ll get any number of different answers. While some reports are focusing on the drying up of funds, others are reporting large deals and the resulting explanations from the companies spending such amounts.  Royal Bank of Scotland has renewed its sponsorship of the Six Nations Championship for four years for a reported £20 million deal even though the bank has reported record losses of £28 billion. Forced to defend this decision in light of the record losses and reliance on UK government bailouts, RBS insists that the sponsorship is necessary for commercial aims and not for hospitality or merely a desire to raise awareness of the bank. However, the troubled bank is scaling back in other sport sponsorship arenas. It announced that it is terminating its partnership with the rights holder Williams F1 team at the end of the 2010 season as part of an attempt to halve its sport sponsorship budget by next year. So far, HSBC and Barclays are also maintaining their relationship with sport.  Alcohol companies are still drinking buddies with sports, even with the increasing restrictions imposed on the advertising of alcohol. Wolf Blass has renewed its sponsorship deal with the Rugby Football Union and will continue as the official wine of English Rugby and official wine supplier to the RFU. As part of the agreement, match ticket holders will be able to sample and purchase wines from a dedicated Wolf Blass bar at the entrance to Twickenham. 

  

While recruitment companies are not having an easy time of it these days, one industry is certain to increase its workforce exponentially over the next couple of years: the London Olympic Games. Adecco has decided to take advantage of the increasing number of employees required to service the upcoming London Olympic games by becoming the Official Recruitment Services Supplier to London 2012. Adecco will be responsible for the permanent and temporary recruitment of personnel for the London Organising Committee of the Olympic Games and Paralympic Games between now and 2012.

 

Car companies are reversing their sport sponsorship spend. Having recently ended its relationship with Tiger Woods, General Motors has announced it may cut back on local dealership promotions. GM pulled out of its Super Bowl advertising, usually a staple of GM’s advertising campaign, and cut some of its spending on NASCAR as well as its sponsorship of the US Olympic Committee. Meanwhile, Subaru and Suzuki have pulled out of the World Rally Championship and Renault Formula 1 sponsor ING has announced it is not going to renew its sponsorship deal after this season after the financial services company was forced to cut 7000 jobs.

 

So where do we go from here? The first thing is not to panic and remember the fundamentals. When the recession is over people will be happy to start spending again and companies do not want to fall off the radar in the meantime. There may need to be cuts, but they should be balanced cuts. Sport sponsorships are an effective way to stay present in the consumer’s consciousness, since sport itself tends to suffer less than other industries in a recession.  If you are a sponsor, focus on your target audience both in terms of geographical location and personality. For example, HSBC is targeting Asian golf tournaments, because as a sport, golf is growing rapidly in Asia and it has both male and female interest as well as family appeal, allowing the bank to reach a new demographic. Don’t be afraid to try something different. Wrigley’s Extra is launching a new campaign tapping into the stress of injury time in Premier League soccer matches. Once the clock hits 90 minutes, the digital perimeter boards and screens at eleven Premier League clubs will advertise Wrigley’s Extra gum.  If you are a rights holder, focus on target sponsors or industries. Consider what rights you have to sell and what demographic you bring to the table. Do not be shy about highlighting the strong points of your sport and the spending potential of your audience. Consider splitting the rights you have to sell in new ways. Epsom Downs Racecourse recently lost its title sponsor, Vodafone, and reacting to the global economic climate, it is dividing up the sponsorship rights for the English Derby meeting into two separate day packages, offering the sponsorship of individual races on Ladies Day and Derby Day. Parties were showing interest in the title sponsorship, but could not commit to the two days of the 2009 Derby Festival due to ongoing economic uncertainty.  And, no matter who you are, if you find yourself in a situation, financial or otherwise, which means you’ll have to call time on an existing sponsorship agreement, get proper legal advice to ensure that you follow the terms of the agreement in relation to early termination.