Sponsors just want to see stars

The IoS sees why football is no longer calling the shots as backers play the field and drive hard bargains

To go by the headlines, sports sponsorship is doing fine. Real Madrid splash out £20m to get their hands on the David Beckham brand, Vodafone spends around £7.5m a year to sponsor his old club, Manchester United, and new Chelsea owner Roman Abramovich is single-handedly keeping the transfer market alive and kicking. Last year, all told, the UK sports sponsorship market was valued at nearly £450m by research company Ipsos.

To go by the headlines, sports sponsorship is doing fine. Real Madrid splash out £20m to get their hands on the David Beckham brand, Vodafone spends around £7.5m a year to sponsor his old club, Manchester United, and new Chelsea owner Roman Abramovich is single-handedly keeping the transfer market alive and kicking. Last year, all told, the UK sports sponsorship market was valued at nearly £450m by research company Ipsos.

Scratch the surface, however, and things are not quite as they seem. For top sports such as football and big "properties" such as Beckham, there will always be a demand. As one marketing specialist comments: "If you are Vodafone on a Manchester United shirt or Emirates on Chelsea, it will cost you £5m, say, for the coverage, but you are doing quite well on that."

With other clubs and sports, though, sponsors are no longer prepared to chuck money at a product in the hope that some of their brand appeal sticks.

Betting exchange Betfair, for example, sponsored Fulham Football Club last year but decided against renewing its contract for the current season. Marketing director Kevin Dale says: "In the end the decision was, if we're going to spend nigh on a million pounds, could we not spend that on marketing elsewhere and get a better return."

Betfair is still sponsoring events, including race meetings, poker on the Discovery Channel and individual competitors in table tennis and darts. But Dale concedes: "It's a complete nightmare to justify to anyone. [With general marketing] you can put search engine tags up and all that online stuff and can measure your return very closely. Sponsorship is the complete opposite scale: you spend X amount of money but can't measure the return. So to justify its existence in our budget is very hard." And that's from a sports betting business.

The fact is, sponsors are only too aware of the tough market conditions brought about by the global economic slump and are driving a harder bargain. As one industry insider says: "Sponsors are concentrating their efforts more. If you have the right product you're fine, but a lot of the fringe areas are finding it much tougher."

This could also go some way to explaining why so many agency businesses have struggled over recent years. In the heady days before the dot-com crash, everyone was throwing money at everything, but now the going is much harder. IMG is fighting to turn itself round, while First Artist, home to Arsenal's Freddie Ljungberg, is reviewing its options after the weak transfer market pushed it into the red and it failed to secure a takeover for celebrity agency Outside Organisation. An insider dismisses suggestions that the company has in effect put itself up for sale, but concedes: "We were riding the crest of a wave and some one took away the ocean."

In addition, football might be a rich industry, but sponsors are being very selective in the players they back, meaning a relatively large number of agencies are scrambling over a relatively small number of clients.

Football also provides the biggest insight into how the market has changed, for Abramovich's spending spree at Chelsea is the exception that proves the rule.

No one provides a better example of the collapsed transfer market than Beckham. Quite aside from his prowess on the pitch, the England captain is a unique brand courted by sponsors from Castrol to Marks & Spencer and Vodafone. He also has a devoted following in the Far East - a lucrative market that all the big European football clubs would love to crack. Real Madrid are not just buying a midfielder, they are bringing on board a marketing man's dream and an open goal for boosting club revenues. To an outsider, therefore, his fee may have seemed just right. But many in the industry believe that only a few years back he could have fetched anything from £50m to £75m.

In addition, his agent SFX is facing something of a crisis. The American-owned group, Beckham and his personal agent, Tony Stephens, are locked in a legal standoff about his decision to quit its services just a couple of months into a new two-year contract signed in August. A £50m court battle has been rumoured if an amicable solution cannot be reached.

The final whistle is not about to blow on sports sponsorship; too many games and players rely on it for valuable income, while the sponsors themselves understand the benefits of gaining exposure to the vast audiences sport can attract. Nor will it ever be a cheap market. But the reality now, in the aftermath of a boom and bust and a tougher economic climate, is that elite players and clubs will be driving harder bargains, and so will the sponsors.

Start your day with The Independent, sign up for daily news emails
New Articles
tvDownton Abbey Christmas special
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
News
news
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Arts and Entertainment
tv
Life and Style
fashion
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Ashdown Group: Brand Marketing Manager - Essex - £45,000 + £5000 car allowance

£40000 - £45000 per annum + car allowance: Ashdown Group: Senior Brand Manager...

Guru Careers: .NET Developer /.NET Software Developer

£26 - 35k (DOE): Guru Careers: We are seeking a .NET Developer /.NET Software ...

Guru Careers: Graduate Marketing Analyst / Online Marketing Exec (SEO / PPC)

£18 - 24k (DOE): Guru Careers: A Graduate Marketing Analyst / Online Marketing...

Guru Careers: Technical Operations Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: We are seeking a Technical Ope...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all