The Annual Sponsorship Business Survey 2012 - Sporsora

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T h e A n n u a l S p o n s o r s h i p B u s i n e s s S u r v e y 2 0 1 2 P a g e | 6 �.0 | �ro�th o� the ��onsorshi� M�r�et 2.1 Overview of 2011 and Predictions for the Future Evidence suggests that despite negative perceptions of the current position of the global economy, the sponsorship industry continues to grow. 41% of respondents of the Sponsorship Business Survey said that their organisation’s sponsorship spend in 2011 increased in comparison to the previous year. Furthermore, 59% reported a real terms increase in sponsorship or no change in real terms investment in their industry sector in 2011. In addition, the TWSM Annual Review 2011 reports that the cars/automotive industry were the top sponsoring industry in 2011 with 210 reported deals. 41% Sponsorship spend: 2010 v 2011 Increased Remained the same 29% 27% 4% Decreased Unsure With regards to 2012, two-thirds of respondents predict a real terms increase or no change in sponsorship investment in their sector this year. Just 28% predicted a real terms decrease, whilst North Americans had the most positive outlook for the year, where the corresponding figures are 92% and 4%. 26% 41% Sponsorship spend prediction for 2012 24% 52% 20% 33% 45% 47% Overall UK Europe North America Increase No Change These encouraging results from the Sponsorship Business Survey are supported by figures recorded by other studies of the sponsorship market. PricewatherhouseCoopers’ (PwC) report of the global sports market to 2015 suggests that sponsorship, alongside media rights, will be an area of growth, putting the traditional dominance of gate revenues under great pressure. PwC project that global revenue from sports sponsorships will increase from $35bn in 2010 to $45.3bn in 2015, which is a 5.3% compound annual increase. This provides positive reading following difficult times for the industry in 2009. PwC’s recent forecasts are healthy, whilst the Sponsorship Business Survey findings indicate that key industry decision makers are willing to maintain or increase their sponsorship investment for 2012.
T h e A n n u a l S p o n s o r s h i p B u s i n e s s S u r v e y 2 0 1 2 P a g e | 7 2.2 Sports Sponsorship by Region 2.2.1 North America PwC’s report of the global sports industry suggests that North America will remain the largest market for sports revenue up to 2015. The study also forecasts growth of the sports sponsorship market for the next three years of 6.1% for the continent, which is slightly higher than the 5.3% global average. Its thriving nature is evident with a series of large sponsorship deals in the continent’s leading sports, such as BBVA’s $100m deal with the NBA, whilst a revival of the US automotive industry has seen companies in this sector increase their spend in sponsorship. Despite this, results of the Sponsorship Business Survey found that North American respondents were not as receptive as elsewhere to the notion of sponsorship having a wider impact than advertising. When asked this question, 39% agreed it was more effective. This was a lower level of agreement than their European (63%) or UK (70%) counterparts. 2.2.2 Europe Despite the financial difficulties of the Eurozone, the European Sponsorship Association values the European sponsorship market at €23.33bn, which is higher than previously forecast. The ratio of sport to non-sport sponsorship is 70:30, suggesting that sport is the most attractive proposition for businesses considering sponsorship. Karen Earl, chairman of the European Sponsorship Association (ESA), argues that sponsorship is becoming more appealing because brand marketeers understand how to activate sponsorships better. With major events such as the London Olympics and the 2012 European Football Championships in Ukraine and Poland, sponsorship in European sport will continue to be an attractive proposition. 2.2.3 The Middle East In recent years, the Middle East has risen in prominence in the sporting world. Bahrain and United Arab Emirates have been hosts in the Formula 1 Circuit, whilst Doha and Dubai are integral to the ATP World Tour in tennis. However, the most significant announcement last year was that Qatar will hold the 2022 Football World Cup. In terms of sponsorship, two significant partnerships involved Middle Eastern based companies. Qatar Foundation became the first shirt sponsors of World Club Champions FC Barcelona in a five-year deal worth £123m, whilst Etihad Airways announced a partnership with Manchester City Football Club valued at £400m, the largest deal of its kind in sporting history. The club’s Eastlands home was renamed The Etihad Stadium as a consequence. 2.2.4 BRIC Nations Growth in the sports market among the BRIC countries (Brazil, Russia, India and China) is expected to continue. PwC predicts a growth rate of 4.5% from $8.3bn in 2010 to $10.4bn in 2015. These countries will continue to enhance their international profile through branding for and hosting major global sporting events. Following China’s 2008 Olympics in Beijing, Brazil will be hoping for similar success in 2016 in their hosting of the event. Furthermore, Brazil and Russia have the next two Football World Cups in 2014 and 2018 respectively. India continues to be a hotbed of sport enthusiasts. Advances in media technology have exposed the Indian population to a vast array of sports such as tennis, football and Formula One, and this has led to an influx of sponsorship interest from global companies including a giant deal totalling over $60 million by Nike to extend their deal with the Board of Control for Cricket in India. Sponsorship is an important revenue source for BRIC nations. Whilst the biggest component of the sports market in North America and Europe is gate revenue, sponsorship is the largest in these four countries. In China, sponsorship accounts for 48% of total sports revenues (PwC). The BRIC nations are expected to see their sports sponsorship markets increase in the foreseeable future.
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The Annual Sponsorship Business Survey 2012 - Sporsora

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