Ian Mallon: It's crunch time for Ireland's €212m sponsorship sector. Here's why.
TITLE SPONSOR: Ireland's Ronan Kelleher is presented with the Vodafone Summer Series Player of the Match Award in Summer 2021. Pic: ©INPHO/Ryan Byrne
THE Irish sports and entertainment sponsorship segment is set to grow by 8 per cent this year, bringing overall investment past €200m for the first time since before Covid.
Forecasters believe that the rate of growth will dip by one percentage point on 2022 (from 9%), as investors pour greater scrutiny over existing deals and future investments – with up 47 per cent of commercial rights buyers looking to exit current contracts.
Such caution comes on the back of financial uncertainty, including the threat of global recession, ongoing war in Europe and an energy and cost-of-living crisis – but what else is at play?
First the positives. The latest forecast report by the Onside Consultancy Group, through their Outlook 2023 analysis, points to a number of attractive assets for Irish sponsors to consider this year, as it predicts a rise from €196m in investments in 2022 to €212m.
These include a FIFA Women’s World Cup – with an Irish team participating for the first time – and a Rugby World Cup in France, as well as it being a Ryder Cup year, with up to three Irish players in Luke Donald’s team.
The standout sports brand is Rugby, where for 2022 commercial investors deemed the IRFU to be the most attractive rights holder in sport due to “the quality of the (Union’s) portfolio and execution”.
Golf is seen by more than one-third of investors (37%) as a major opportunity platform over the next three years - along with athletics - thanks to such luminaries as McIlroy, Maguire, Lowry and Power.
While the report doesn’t name him, you can expect Seamus Power to capitalise on an extraordinary run in 2022 to fastest rising sports asset in the year ahead, thanks to his central role at the Irish Open, and that potential Ryder Cup pick.
Last year 66 per cent of sponsors increased their spending, as the impacts of Covid dissipated and sport returned back to normal live environments – while 17 per cent of rights buyers adjusted downwards.
But then there is some concern for the market. A worrying 71 per cent of sponsors declared that budget constraints would be an issue, with just over half blaming a cluttered marketplace, and 49 per cent preoccupied with ‘economic uncertainty.
Despite caution, 53 per cent of current investors are expecting to increase spend in 2023, down one point on 2022 – perhaps tellingly, no active spenders are expecting to decrease investments.
What is more certain is the ongoing rise in Women’s sport, and while the FAI still works to secure cash-only investments vs fees/services deals, the Women’s National Team’s partnership with Sky was declared the best sponsorship of the year.
Indeed female sports more generally were highlighted by Onside’s Outlook 2023 for special mention.
“Sponsors that championed Women’s Sport such as Sky (with the Women’s National Team), Lidl (with the LGFA) and KPMG (Women’s Irish Open Golf) were singled out by the industry for the best sponsorships in 2022,” said the analysis, by Onside founder and CEO John Trainor.
Of major significance is the number of fee-payers - six in 10 investors – who are on the lookout for new properties in 2023 – “a drop of 7 per cent from 2022, although still remaining at a high level”.
This translates into almost half – 47 per cent of sponsors - looking to exit current deals in the year ahead, a surge of 12 per cent year-on-year.
One area which will only increase in value is the use of digital marketing, with the rise of TikTok and other video-sharing platforms like Instagram, which will see major growth - 77 per cent of investors will increase activity on these channels, a 22 per cent lift on 2022.
As far as individual assets are concerned, the report’s - Most Marketable Personalities Index - is dominated by female sports stars with both Katie Taylor and Katie McCabe, each enjoying 13 per cent affection amongst sponsors surveyed.
Kellie Harrington is next with 10 per cent, while David Clifford, Josh Van der Flier, Johnny Sexton, Shane Lowry, Rachael Blackmore, Rory McIlory and Vera Pauw amongst the most attractive individual sporting assets for brands.
The greatest sponsorship opportunities per industry sector comes from Banking, then Teleco, with Retail, Airline and Insurance making up the top five most valuable segments.
The newest and fastest growing areas for opportunity, outside of the traditional sponsorship segments, come through sustainability and the environment, an area of strength for Munster Rugby, as reported in The Pitch in recent months.
While the vast majority of Irish sporting assets are yet to focus on green activations, the area saw a major reduction in growth year-on-year to 45% for 2023, from 42% last year, which was up from 33% in 2021.
The most visible brands in Irish sports sponsorship include Lidl, Vodafone, SuperValu, Aldi, Guinness, AIB and Bank of Ireland – all strong Rugby, Golf and Gaelic games partners.
The strategy was clear, if not ambitious at the time — and achieved $3m in shoe sales over a four-year commercial cycle.
Today, the Air Jordan brand earns $3m every five hours and the origins of that historic partnership is coming to a silver screen or mobile device near you, with an April release date on Amazon Prime.
Air, directed by Ben Affleck tells the story of the collaboration and birth of the Nike-Jordan partnership, from Vaccaro’s wise brand-hunch to its continued expansion today.
Affleck plays Knight, while Matt Damon will play Sonny — in the drama which has been given an April 5 release date in cinemas by Warner Bros before it flips over to Amazon Prime for subscriber release.
Jason Bateman, Chris Tucker, and Viola Davis are included in the heavyweight cast for the Alex Convery-written story of sport’s greatest commercial collaboration.
Jon Elichman, business historian and Bloomberg markets anchor, wrote last year that Nike’s original hopes of achieving $3m in sales today translates as a daily payment to Chicago Bulls legend Jordan of $410,000 per day.
According to Forbes, Jordan earned $150m in 2021 from the brand, and its legacy continues to balloon to an annual value of almost $5bn — accounting for 13.17% of Nike’s overall revenues.
The PDC has released data to demonstrate the growing power of the Christmas and New Year sporting staple, which saw 90,000 fans attend the tournament during its run at London’s Alexandra Palace — paying out €4m for tickets.
The Pitch estimates that these fans will have spent an additional €3m on ‘refreshments’ in the arena itself and throughout the darts ‘village’ for a tournament which is climbing towards €20m in overall value.
From a PR and visibility perspective, the event was topped off by an exceptional final, which included “the greatest leg in history” as eventual winner Michael Smith achieved a nine-darter, after Michael Van Gerwen just missed out on his in the same leg.
A 90-odd second clip of that game received social media traction of more than half a billion hits on all digital platforms, making it the most watched darts footage in history.
The moment of sporting perfection was discussed by NBA legend Shaq and Charles Barkley on Inside the NBA in the US, and featured on the MMA Hour podcast with Ariel Hewani.
German star’s Gabriel Clemens’ run to the semi-finals of the tournament was watched by a record-smashing peak of 3.78m viewers in Germany on DAZN, and received the public praise of Real Madrid star Toni Kroos.
A record 901 180s were recorded, including a record 37 hit by Smith and Van Gerwen in the final, while three female competitors competed alongside the 93 male throwers.
