Sponsorship market expected to grow this year following 24% drop

Markets have agreed to sponsorship deals at rates 50% less than what they would have garnered pre-Covid.

Vodafone’s partnership with the IRFU was again voted by the industry as the best sponsorship of the past year. Picture: Bryan Keane Inpho

The value of Ireland's sponsorship market fell by €54m last year due to the impact of Covid-19 with seven in 10 sponsors decreasing their sponsorship investment during 2020.

The annual sponsorship survey by Onside reveals the value of the market fell by 24% to €170m but that 2021 will see a return of 7% growth in 2021.

Of the firms reducing sponsorship last year, 91% attributed the reduction to the impact of pandemic-related restrictions. Globally the sporting and events markets have been decimated by restrictions on large gatherings. The fall-off in sponsorship has placed the finances of many organisations under further pressure as cancelled events also meant they were unable to sell tickets.

Onside CEO John Trainor said that despite the pandemic, the sponsorship industry in Ireland is showing good resilience. "The flexibility that rights holders and brands have shown in the past 12 months bodes well for a market recovery," he said.

Onside found 41% of sponsors are planning to increase their investments in sponsorship in 2021, compared with 38% a year earlier. However, the report notes that “under intense pressure to bring in revenue absent due to the inability to sell tickets, many properties in mature sponsorship markets, particularly those below the top-tier national sports level, have agreed to sponsorship deals at rates 50% less than what they would have garnered pre-Covid."

Vaccination rollout plans have led to hopes that fans can return to major events later this year however the market will continue to be impacted with 63% of sponsors in Ireland expecting sponsorship fees to decrease in 2021. Trainor notes that “previous experience with price elasticity in sponsorship indicates fees will not immediately bounce-back to pre-2020 levels”.

Three in four sponsorship industry practitioners are optimistic that the sports industry will recover from the impact of Covid-19 in the next one to two years, compared with two in three in the case of the live entertainment industry.

Vodafone’s partnership with the IRFU was again voted by the industry as the best sponsorship of the past year, with others standing out including supermarkets SuperValu and Lidl, financial services providers AIB, Bank of Ireland and FBD and energy sponsors Bord Gáis Energy and Electric Ireland.