This is purgatory ": what will the sponsorship sports market be like after the pandemic

This is purgatory

Sponsorship in professional sports is a common occurrence in our time. Well-known companies are ready to spend millions of euros in support of sports teams, and in return receive advertising and income from the results. We are talking about the sports assets of the three largest global corporations.

Gazprom

Assets: football (Zenit, Orenburg, Tom, Schalke 04, Crvena Zvezda, Austria, UEFA Champions League), hockey (SKA, Avangard) , basketball (Zenit), volleyball (Zenit), cycling (Gazprom-RusVelo)

The energy company is known all over the world not only for oil and gas production, but also for its sponsorship. Several football, hockey, volleyball and basketball clubs are under the care of Gazprom.

The most famous sports asset of the company is the Zenit football club from St. Petersburg, whose controlling stake was acquired by Gazprom in 2005. Then the team was given an ambitious task: to win three European cups in 10 years. Zenit practically coped with it. Thanks to Gazprom's investments, St. Petersburg citizens were able to become one of the most famous football clubs in Europe and the leader of the Russian championship. In the 2007/2008 season, Zenit won the UEFA Cup (Europa League), and a little later took the European Super Cup. Thus, Zenit has two European cups now.

It was with Gazprom that Zenit began to gradually enter the elite of the Russian championship. During his tenure with the St. Petersburg club, he managed to win the RPL championship six times, take the National Cup three times and the Super Cup five times. Last season Zenit scored a golden hat-trick by winning the RPL, Cup and Super Cup.

At Zenit, Gazprom's sponsorship in Russian sports does not end. The company is the general sponsor of FC Orenburg (formerly Gazovik - Fingazeta), in which it invests about 100 million rubles annually. In the 2019/2020 season, Orenburg was unable to maintain its registration in the Russian Premier League and was relegated to the first division.

Also in winter it became known that Gazprom allocated 660 million rubles to the football club Tom from Tomsk for support. In recent years, the club has had serious financial problems, and this money, according to sources, should be enough to pay off debts. In July, the official Tomi website published news about the club's cooperation with Gazprom under the Home Towns program aimed at popularizing sports in the Tomsk Region.

The company renders sponsorship to the hockey clubs SKA (St. Petersburg) and Avangard (Omsk), as well as the basketball and volleyball clubs Zenit (St. Petersburg) and the Gazprom-RusVelo cycling team.

Gazprom is active in Europe. The company is the title sponsor of the German club Schalke 04, the Serbian Crvena Zvezda and the Austrian Austria. In 2012 Gazprom became a partner of the UEFA Champions League. In 2018, the contract was extended until 2021. The company annually donates about 40 million euros to UEFA so that fans can see its logo at UEFA matches.

RedBull

Assets: Formula 1 (RedBullRacing, ScuderiaAlphaTauriHonda), football (Red Bull Salzburg, RB Leipzig, New York Red Bulls, Red Bull Brazil, Red Bull Bragantino ), hockey (Red Bull Salzburg, Red Bull Munich), etc.

In the 2010s, the sponsorship market showed stable growth - 4-5% per year. In 2018, according to the World Advertising Research Center (WARC), companies' expenses on sponsorship contracts amounted to $ 65.8 billion.The European Sponsoring Association (ESA) in the same year estimated the total volume of partnership deals in Europe at € 30.1 billion. at the same time, the sports segment - thanks to the FIFA World Cup and the Winter Olympics - grew by 8.7% (to € 20.07 billion).

According to various forecasts, 2020 could repeat and even improve these numbers, however, the coronavirus in a matter of months stopped almost all regular sports on the planet, and also canceled two main marketing events of the year - football Euro 2020 and Summer The Olympics. The sponsorship market froze in uncertainty. Many companies are forced to cut costs and redirect funds to boost offline and online sales. In this situation, when in sports there is no understanding of the prospects even for the next 2-3 months, brands pause current agreements and negotiations on possible cooperation. “It is difficult to assess the impact of the pandemic on the sponsorship market right now,” says ESA Director Andy Weslake. “But, for example, in Europe, 2/3 sponsorship is due to sports, which are either canceled or suspended indefinitely. So the impact of the coronavirus will be both significant and lasting. "

Hand of the Market

In Russia, professional sports are still heavily dependent on budget funding, but the share of revenues from commercial sponsors has been slowly growing in recent years. So, in the 2017/18 season, the sponsorship revenue of the three major leagues of the country (RPL, KHL and VTB United League) amounted to 46.5 billion rubles (about € 700 million at the average rate for the period). Taking into account contracts in other professional leagues and amateur sports, the total volume of the sponsorship market in Russia was about € 1 billion per year before the pandemic. Due to the coronavirus and the cancellation of events caused by it, the numbers in 2020 will change dramatically.

Financial obligations in partnership agreements between professional clubs and leagues are usually tied to the number of matches and TV shows, and are paid on a quarterly basis. In the public field, there have been no official announcements about the termination of contracts, and, for example, the Rossiya airline on April 21 announced the extension of its partnership with Zenit for a year and 97.5 million rubles. But in reality, payments under many existing contracts are frozen. It is not a fact that they will be restored in full if the tournaments continue. First, due to the coronavirus, companies are suffering losses and are forced to cut "unnecessary" marketing costs. Secondly, the competitions will be held in the “without spectators” format for a long time, which also does not correspond to the original terms of the contracts.

The total sponsorship revenue of professional sports in 2020 will be reduced by at least a quarter if the main championships are finished. In the case of a less optimistic scenario, the losses will be even greater.

Event Marketing

Perhaps, the pandemic inflicted the greatest damage on the organizers of sporting events - amateur competitions and festivals. This segment of the market showed good growth in the 2010s, quite successfully applying the self-financing model - through market sponsors and ticket revenues.

But all spring events were canceled by quarantine, and summer events are being actively postponed to next year. For example, the organizers of the Quicksilver New Star Camp were not lucky, which for the 11th time was supposed to be held at the Rosa Khutor resort in late March - early April. Usually the festival gathered about 5000 people and more than 15 partners for tens of millions of rubles. “In general, the share of sponsorship contributions in our budget is about 50-50 with ticket sales,” explains Igor Ignatiev, founder of New Star Camp. - In 2020, we had to cancel everything literally 10 days before the event, so we fulfilled part of the obligations to sponsors during the promotional campaign. Many partners met us halfway, and we agreed on new payment schemes ”.

However, negotiations on future events have so far been stopped, Ignatiev says. “We are now looking at new formats that we never got around to before,” he adds. - We will be engaged in organizing live broadcasts, creating online content - this is now in high demand. Moreover, for a number of partners of the festival, we are also a creative agency, coming up with integrations. And now it is very important not to lose contact with them, because companies are still looking for ways to communicate with the audience. "

The League of Heroes, Russia's largest organizer of amateur sports events, until recently planned to hold one of the main events of the year on May 31 - the ZaBeg half marathon, but now it has been postponed to August 2. But in quarantine, everyone is invited to run the selected distance at home/in the country/on the balcony - with online time recording and a 40% discount on registration.

At the same time, the work on finding partners continues. “We cannot afford to stop,” says Daria Ivanova, commercial director of the League of Heroes. - Yes, some negotiations were paused until the quarantine was canceled, but we adopted new rules of the game and shifted the focus to online business, pharmaceutical companies, etc. "

None of the current sponsors have broken relations with the League of Heroes, and thanks to the organizers' activity on the website and in social networks, companies can interact with the audience. In addition, during the quarantine, this audience may grow, says Ivanova. “The current situation has exposed the problem of a sedentary lifestyle,” she explains. - People realized that an active life, in which there is not only work and a computer/TV, but also sports, strengthens the immune system. I think that on the way out of the pandemic, the number of healthy lifestyle supporters will seriously increase. And these people are the most active consumers, that is, the target audience of most companies on the market. "

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