Major 'one-off' events mask modest growth for sports sponsorship: Key Note report

According to Sports Sponsorship, a new Market Report from market intelligence provider Key Note, when the major 'one-off' events are excluded from forecasts for the period up to 2013, underlying growth will be quite modest for sports sponsorship. The difficulty will be that some Olympics and Commonwealth deals will probably detract from other sports.

Sport funding will increase dramatically over the next four years to 2013 because of the two major events to be held in the UK: the Olympic Games (London 2012), targeting sponsorship worth over £600m, and the Commonwealth Games (Glasgow 2014). However, the report points out that these events could temporarily divert funds from the regularly sponsored sports led by football and Formula 1 racing. These two sports account for more than 50% of sports sponsorship spending in a market otherwise fragmented across dozens of sports for potential sponsoring. The financial services sector retains the leading position for sports sponsorships, although its share slumped to 15.7% of deals in 2008. Preparations Since sponsorship deals are made over several years, the recession did not have an immediate impact on most sports (in 2007 and 2008) since deals were already in place; however, as 2009 has progressed, sponsors have had to review their commitment and several financial groups have pulled out of sponsorships. Despite this, however, the prospects for sponsorship are still sustained by the ongoing preparations for hosting the Olympic Games and the Commonwealth Games. Key Note's report concludes that, by 2012, there may be danger of saturation     " ... Olympics and Commonwealth deals will probably detract from other sports": Key Note report --------------------------------------------------- in the sports market and a generally jaded atmosphere following the build-up to the Olympic Games. While the volume of non-Olympic deals is likely to increase relatively fast on the back of 'Olympics fever', the average value per deal may well decrease (with higher-spending companies siphoned off to the Games). In line with concerns over obesity and lack of exercise for children, there is a trend for more investment in grass-roots programmes, which may not be very expensive or high profile, but can satisfy a company's need to fulfil its corporate social responsibility. In excluding sponsorships of London 2012 and Glasgow 2014 deals, Key Note forecasts* overall year-on-year growth of 20% for 2009 to 2013, with the market reaching a value of £600m by 2013.   * based on Ipsos MORI data.