The Value of Sports Sponsorship to Both Parties in the Deal (Essay Sample)

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The value of Manchester United’s football sponsorship to both parties in the deal
Introduction
Football sponsorship has gradually revolutionalized into a multi-billion dollar venture as it becomes increasingly associated with cost-effective advertising and ability to create brand recognition in wide area coverage. Football sponsorship has long been known as an avenue for companies to gain publicity and thereby increase sales volume among football followers. As a result, companies are always competing to sponsor major leagues and teams in order to achieve this objective. In this paper, the benefits derived by sponsoring bodies as well as those gained by players and football clubs are studied to determine the value of sports sponsorship for each. This is done with Manchester United Sports as an example in football sponsorship.
Discussion
Event sponsorship is normally done with the objective of promoting brand image, enhancing corporate image and realizing public good will (Wise and Miles, 1994).
Corporate sponsorship is identified as one of the strategic components of the communication, advertising and promotion mix in contemporary organizations. According to Reiser, Breuer and Wicker (2012), sports sponsorship is among the best approaches to build a communication channel with the customer and thus an efficient advertising strategy in modern times. This has been the main focus of Manchester United sponsors over the years including AoN, Nike, Chevloret, AFB, AEROFLOT and DHL among others. They take advantage of the huge following by Manchester United fans to create visibility for their brands. As noted by Kim (2010), football event sponsorship guarantees that a company can reach millions of football fans; better than any other form of advertising.
Brand reputation and recognition are highly desirable aspects as far as marketing is concerned and football sponsorship offers sponsoring companies the opportunity to build their brand without much effort. Abosag, Roper and Hind (2012) note that football fans have considerable emotional attachment to their clubs and are more likely to identify with their team’s brand. When a football club is associated with a certain company for example, followers of the game are expected to recognize the brand more effectively (Taylor, 2011). AoN for example is keen to ensure that their brand stands out through Manchester United branded merchandise and advertisements. Brand popularity combined with other marketing variables certainly improves the market share of a company as noted by Keifer (2014).
Clark, Cornwell and Pruitt (2009), note that sports sponsorship in general plays an imperative role in promoting future cash flows through building the company’s image and creating customer awareness. Through branding and advertising witnessed during major leagues for example, customers become more aware of the existence and use of sponsoring company products. In 2014 for example, General Motors announced that Chevrolet sales were expected to peak following the FIFA World Cup in 2014, particularly in Brazil, which is considered the third-largest market after USA and China.
Football sponsorship ensures that a company can effectively increase investor confidence by offering greater returns on investment. Sponsorship leads to increased share prices and consequently increased owners’ capital. The power of corporate sponsorship is undeniable and as put forth by Clark, Cornwell and Pruitt (2009), announcement of sponsorship deals is enough to drive the company’s share prices up. Investors see sponsorship deals as investments that will create profitability in the future and sponsoring football teams is therefore a value adding strategy for any organization.
Football sponsorship helps companies to achieve their corporate social responsibility expectations and thus build their reputation within the community; which in turn results in greater returns and an elevated brand image. Blais (2000) notes that the community is inclined to associate with companies that value the welfare of the community and which invest in making the lives of community members better. Consequently, such companies are expected to record greater sales because they have been ‘endorsed’ by the community. Spence Wise and Miles (1994) refer to this as seeking public goodwill; which is highly essential in promoting the company’s reputation.
The business of corporate sponsorship, though highly beneficial for sponsoring companies, also offers considerable benefits for beneficiaries as discussed below:
The capacity to participate in major football leagues is highly expensive and without corporate sponsors, a majority of clubs would not be in a position to participate. Furthermore, a huge amount of resources is required to prepare for such games. Money available from sponsorships ensures that Manchester United can employ highly qualified coaches and pay for excellent training material and venues (Blais, 2000). This is of great importance because it allows for the development of strong teams which can compete effectively at various levels.
Football players are major beneficiaries of corporate sponsorships and this can be justified by the high salary levels that Manchester United players take home. A majority of players earn between £50k and £80k per week; with more valuable players such as Wayne Rooney and Robin vab Persie earning £300k and £250k respectively. It is evident that without sponsorships, football clubs would not be in a position to pay such huge sums (Blais, 2000).
The skills gained contribute immensely to player expertise, which in turn increases their popularity and market value. Kiefer (2014) notes that highly valued players attract potential employers and higher wages as clubs seek to attract sponsorships through engaging high value players. With increased popularity, players could also land advertising opportunities and earn money away from football. Kiefer (2014) gives David Beckham as an example, having endorsed many products following his global popularity and thus earning more through advertising.
Sponsorships are a major boost for community football and have ensured that local communities can produce potential football players (Jenkins and Laura, 2011). It also ensures that talent is nurtured, especially in school sponsorships, which end up producing highly talented players. It is notable that a majority of football players were discovered at a young age and were they not in a position to join a sponsored team, their talent may have gone to waste. Such players not only benefit from effective training but they are also in a position to travel and participate in external matches.
Football sponsorships have played a great role in promoting community welfare (Jenkins and Laura, 2011). This is mostly evident where football sponsorships are aimed at addressing a particular issue affecting the community, such as combating drug abuse, early pregnancy and promoting HIV/AIDS awareness among others. Manchester United is known for its football academies which seek to promote young talent and hence develop young people.
Conclusion