Government and Sponsorship

Does government really understand sponsorship and sponsorship marketing? Do government people get it or are they too bureaucratic to understand business 101? Trust me, some governments understand sponsorship and do it well. The Cities of Edmonton and Toronto, and the towns of Minnedosa, Manitoba, Canmore, Taber, and others get it right and have reaped the rewards for their coffers to the benefit of both sponsors and citizens. But there are others that just don’t and may never do so.

This came up recently as I was reading an article in the Regina Leader Post. NDP MLA Trent Wotherspoon was questioning the sponsorship investments of Enterprise Saskatchewan, SaskTel International, and SaskPower at conferences outside the province and out of the country. He questioned why they were doing this, implying that they should keep their money at home. It is that narrow-minded, silo syndrome approach that ensures a government with crown corporations (or any business, for that matter) will ultimately fail. It is that mentality that sees no future growth and revenue opportunities. Both SaskPower and SaskTel seek to serve markets outside Saskatchewan (as SGI – Saskatchewan Government Insurance has done so well) to broaden their revenue base and attract additional revenues for the citizens of Saskatchewan. Perhaps Mr. Wotherspoon’s philosophy is that the government should finance everything at home and ensure that local conferences, arts organizations, and such survive solely on the revenues of government grants and sponsorships. Where does he think the supporting revenues will come from? “Oh yes,” he must be thinking, “let’s increase taxes and create an entire welfare state so that none of these organizations need to be self-sufficient or self-supporting. In my book, that is crazy. Like any business, the crowns need to grow their businesses. They do that by investing in growth and sometimes part of that growth investment is marketing, and specifically, sponsorship.

On the other side, when it comes to understanding selling sponsorship, the Government of Saskatchewan, along with many other governments, fail to understand what it has to sell and its value. The “new stadium” for the Riders has yet to have a full inventory asset identification and asset valuation completed but they (government) are projecting revenue potential. That is like saying, “We don’t need to do any geophysical work prior to drilling for oil or natural gas… we will just guess where to drill!” This is my concern with government understanding of sponsorship.

It is not restricted to Saskatchewan. Last month, I had a great conversation with “Jungle Jim Hunter.” (many of you will remember him and his Crazy Canuck teammates, and their team domination of the alpine ski hills worldwide from 1974 to 1984) on his weekly radio show. Members of our Partnership Group – Sponsorship Specialists™ team and I have the privilege of chatting with Jim on his show each week on the topic “The Business of Sport.” That week, we addressed the failure of government to understand sponsorship. We identified the City of Halifax’s issues around its oval naming with Emera, the failure of the City of Winnipeg to convert a dream of sponsorship into reality, and of course my hometown issues in Calgary. The City of Calgary is about to build four new multiplexes. They have hired a philanthropic consulting firm (which is a good thing to do) to assist them in development of fundraising for these projects. Unfortunately, neither the company nor the City has conducted a full inventory asset identification or valuation. I worry that they will end up like so many others and have their “sponsorships” sold at rates that are unrealistic in relation to real market value. But even worse, they will apply those revenues to the capital building campaign and not to ongoing operational revenue, which is where they need to go. Perhaps it is time that people in municipal, provincial, and federal governments gain some knowledge about sponsorship, how it works, how it can yield huge dividends if it is done right-and how devastating it can be if it is done wrong.

These are just one person’s thoughts. Yours are welcomed as well. Please add your thoughts or comments to our blog by comment below. Thank you for reading and your feedback.

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