Status No: “Official Partner” Role No Longer Fits Many Brands
For decades, one of the bedrock benefits in sponsorship agreements has been the designation of the sponsor as an “official partner” or the “official fill-in-the-category-here” of the property being sponsored.
But as the sports and entertainment marketplace has changed, recent years have seen fewer brands prioritizing, seeking out or even wanting official status, for many good reasons.
To begin, designation as “official” has long been tied to category exclusivity. Over time, many brands—even those in highly competitive categories such as beer and banking—have made the decision that being the sole partner in their category, while nice to have, often is not a must-have, especially for the price properties charge for the privilege.
Brands no longer feel compelled to have rights and benefits tied to every aspect of a property. As they have honed their objectives around partnerships, they are able to identify key assets that will optimize their activation efforts against their target audience and increase their chances of earning a positive ROI.
Thus two beer companies can happily co-exist sponsoring the same pro sports team, for example, because one has identified that in-stadium presence is paramount for its business, while another primarily desires rights to conduct on- and off-premise promotions in the local market.
Of late, brands have expressed a new motivation for staying away from “official” positioning: the opportunity to distance themselves from either missteps by the sponsored organization or controversial cosponsors they would prefer not to associate with.
As we’ve mentioned in earlier posts, corporate partners are attention magnets when properties become embroiled in scandals or suffer other misfortunes. Naturally, the biggest sponsors—often the ones with “official” status—are the biggest targets of media and public attention when things go wrong.
Sponsors can take steps to avoid that negative association by connecting with a team or league on a more limited basis that still delivers access to fans and consumers without the stigma of enabling bad behavior by executives, toxic cultures, etc.
With more sports betting partnerships popping up across the U.S. sports marketplace, as well as deals in other so-called “sin” categories, there have been discussions among some other sponsors about minimizing the interaction of their brands with industries and companies that may not fit with their corporate image and values.
Here again, marketers are finding a more targeted approach to sponsorship assets can be helpful. The university you sponsor just signed a controversial beer partnership that puts your brand in jeopardy? You can minimize sharing that spotlight by negotiating a content sponsorship that focuses on the athletes at practice or something else less likely to suffer direct backlash.
In the end, the trend toward fewer sponsors wanting or needing to be a major, top-level, “official” partner will most likely be a revenue wash for properties. While they may not be able to sell as many large, all-encompassing packages, the ability to forge non-exclusive deals with many more brands should balance things out.
The chief concern for both rights holders and their partners if the demise of official partnerships continues will be additional sponsor clutter and noise. This will be the reason that “official” and exclusive status will never die out completely, as there will always be some brands that place a high value on not having to compete for attention.