The Economy is Falling... But the Sponsorship Industry is Rising!

Good news for corporate sponsors and property reps... Despite questions of a recession in 2008, sponsorship spending is slated to increase 12.6% (IEG), the highest single-year jump since 2000. Sports sponsorships are estimated to account for $11.75BN of the overall $16.78BN sponsorship spending in the US and Canada (rights fees alone). (Source: SBJ, 2.18.2008).

Mel Poole of SponsorLogic recently made a eight (8) excellent points about how properties can survive the troubling economic times of '08 in a recent SBJ column:

1. Get aggressively involved with helping sponsors measure ROI in terms that are clear and valuable
2. Be flexible and give sponsors the ability to best match property assets to rapidly changing needs and marketplaces
3. Carve out, embrace and protect your property’s unique positioning in the marketplace
4. Embed your property into as many operating business units of your sponsors as possible.
5. Drive out as much of the hard costs incurred in managing your property as is reasonable, but do not cut back on aggressively marketing your property to qualified sponsor prospects.
6. Consider reducing the rights fees of some categories in exchange for increasing in-kind sponsorships that can relieve property budget pressure.
7. Focus on signing multiyear agreements that bridge periods of economic boom and bust.
8. Examine your contracts’ sponsor exit clauses. They should be oriented toward encouraging a sponsor to work through challenges. Try to install exit clauses that provide incentives to sponsors to help you replace them by leveraging the exiting sponsors’ sister companies and vendors.

Projected 2008 North American Sponsorship Spending By Property Type (Source: IEG 12.24.07):