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Where Does Sponsorship Stand?

Among the first questions I am asked these days is what is the forecast for sponsorship spending in light of the pandemic? Using the 2008-09 recession’s impact on sponsorship and activation as a guide, we can expect to see a decline in sponsor spending this year compared to 2019 and likely little growth in those budgets for 2021.

Beyond that horizon, it is difficult to say with any certainty how sponsorship spending will trend, given the large number of variables that will ultimately play a factor, including vaccine development and deployment, overall economic conditions, how quickly rights holders adapt to new marketplace challenges, etc.

But just like a decade ago, the overall picture will mask what is happening with individual brands, as some businesses in industries most impacted by the pandemic—think travel, restaurants, etc.—will institute severe cost controls to stay afloat, while others that experienced a less dramatic “pause” will be in a position to restore marketing activity and may even seek to acquire more sponsorship rights in what will likely be a “buyer’s market.”

A similar disparity is likely to be seen among rightsholders, with smaller organization and single-event producers struggling to sustain themselves, while established leagues, teams, federations and venues—along with major event organizers and promoters—will be better positioned to weather the storm due to stronger financial positions and long-term partners less likely to invoke force majeure contract clauses.

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