In recent months, there has been a lot of excitement about big sponsorships and professional sport.
Molson won its NHL sponsorship rights opportunity over Labatt. VISA walked away from Bobsled Canada, leaving a major hole in the revenue side of that organization. RBC and HBC announced renewal agreements with the Canadian Olympic Committee beyond the 2012 London Games. CIBC and Chevrolet announced sponsorships with the 2015 Pan/Parapan American Games. And ScotiaBank announced that it is now a major sponsor and the official bank of the Toronto Maple Leafs.
By my account, these deals account for over $425 million in sponsorships. So, how do the little guys play in the big leagues? Or can they even play in the sponsorship world at all?
With the return of the Jets, we are seeing lots of small Winnipeg businesses trying to ride on the coattails of the team—but to no avail. The game has changed since the team was last in town. Unless you pay the fees, you cannot use the logo, or mention the club’s name, or promote players’ appearances other than their names and “hockey player.” Ask the small Montreal restaurant that tried to be a local supporter of the Montreal Canadiens during the playoffs last spring and was fined over $60,000.
Professional sports are big business. You either play by their rules or you don’t play.
In my opinion, that does not mean you cannot play in the big leagues. And it certainly does not mean that you cannot play at all. If you want to play in the big leagues, you need to be strategic. Years ago, we struck a deal with a local home builder and the Calgary Flames. They are not paying six figures, but are still with the hockey club, and in fact, have added the Oilers to their portfolio. The key is activation. You must know your objective, focus on achieving it, and not be oversold assets. Another example is to partner with the sport’s broadcast partner. That is usually much less expensive and reaches a larger audience. Small businesses were partners at the Vancouver Olympics as well. It comes down to being strategic.
Overall, yes, the little folks can play in the sponsorship game. Every day, we work with many clients that are small properties selling sponsorship. Many of them are generating anywhere from $100,000 to $500,000 or more a year because they are doing it right. How can they compete with the Toronto Maple Leafs, the Olympics, and the CFL? Strategically! They approach the right prospects with the right programs and assets through a discovery session, and ask them for the right amount of money in a customized proposal based on the prospect’s budget. And yes, they are very successful.
And for our brand clients or sponsors, how do they succeed if they do not have seven-figure budgets or more? Again, it is strategic. We work with them to negotiate agreements with properties that are relevant to them. We work with them on properties that are grassroots and local, regional, or national, as they may require. We work with them to activate on the smaller rights fee investment. They are winning the battle and the war. They are integrating their sponsorships with their traditional marketing plans and media. They are filling niches and making programs work.
Our company itself does several annual sponsorships ranging in cash and contra from $1,500 to $10,000. Nothing huge. But from the smallest to the largest, they work. Otherwise, we would not renew them. So yes, smaller organizations (properties and sponsors) can play in the sponsorship world. And yes, if it is strategic, they can play in the big leagues as well.
These are just one person’s thoughts. Yours are welcomed as well, please comment below. And thank you for reading.
Brent Barootes