How Sports Sponsors Can Benefit From a Game-Time Decision
Strategic thinking on sports sponsorship logically puts value on closing the deal far enough in advance to prepare and make good use of the marketing and communications build-up before a sponsored event. For the biggies like the Olympics and the World Cup, the lead time on sponsoring relationships is years, or even decades. This allows for brands to develop multifaceted, multilayered international programs.
However, arranging a sports sponsorship at the last minute can reap significant rewards, as well. Beverage brand Monster Energy sealed the “seven-figure-plus” deal to sponsor the Triple-Crown-winning colt, American Pharoah, before the race, according to the New York Post. This precedent-setting deal included the typical signage on the horse and the jockey at the center of the action. What made the sponsorship special was the last-minute “betting quality” of the decision.
There are many reasons that Monster could have chosen for branching out to horse racing. Sponsorship of popular youth sports by energy drinks and soda has been receiving a good deal of criticism lately. With Monster’s extreme sport sponsorship portfolio under fire, the brand might have wanted to move to more adult audiences. Another reason for Monster to choose horse racing is the sheer energy surrounding the sport, which matches its brand image. The most compelling interpretation of this sponsorship decision is that it was opportune, if not stunningly opportunistic. Nonetheless, by most accounts, it was stunningly successful: Monster logo caps were seen on the jockey, Victor Espinoza, across all broadcasts.
And this doesn’t seem to have been an isolated event in the sports sponsorship world. The ability of the American Pharoah sponsorship to return value for the sponsorship money was predicated on winning. Clearly, there are no guarantees on that, but there may be other reasons to forego the much-acclaimed pre-event communication phase.
For example, the “white knight” interpretation of last-minute sponsorship deals centers on the corporate sponsor saving the day and the event, and perhaps even other sponsors and the local economy. The Tour de Georgia cycling race was cancelled after several successful years because it was not able to secure regular sponsorship. The event team did not find a white knight to save them. The event team did not find a white knight to save them.
In contrast, in 2007, Hartford-based Travelers Insurance took title sponsorship of the PGA stop in the company’s home state just when rescue was essential. This was tricky business since, at the time of the deal, the date of the PGA tour schedule was uncertain. What was certain was that New England would lose out if a sponsor was not found. Since then, Travelers has renewed the relationship, with the most recent contract extending into 2024. Any build-up stage for communications lost by taking the sponsorship late in the first year has been offset by audience gratitude (and, perhaps, reciprocity) over time. The interpretation then and now is of a company devoted to its community in Connecticut.
Are there foolish, investment-wasting, last-minute sponsorships? Yes. (Some college football bowl game sponsorships will go unmentioned here.) If, however, the calculated risk offers an adequate payoff, brands could add some surprise or heart to an otherwise properly planned sponsorship portfolio.
T. Bettina Cornwell is the Edwin E. and June Woldt Cone Professor of Marketing at the University of Oregon and author of Sponsorship in Marketing: Effective Communication through Sports, Arts and Events.