By Deena WaisbergÂ
Traditionally, when a company sponsors a team or event, it pays to see its logo splashed across the scoreboard, the arena walls and in programs. But in this economy, companies are scrutinizing their return on investment and many sports organizations are struggling to attract and retain sponsors.
Last year, the sports industry's sponsorship spending growth rate was nearly 15%, almost double the next-closest category. But it is nevertheless projected to have the smallest increase in 2009, according to the IEG Sponsorship Report, conducted by IEG, a Chicagobased sponsorship research and consulting company.
"The cost of entry is high -- some of these deals can run six figures," says William Chipps, IEG Sponsorship Report's senior editor. "We're seeing a combination of companies discontinuing a sports sponsorship or deciding to continue it at a lower leve."
Corporate involvement for the 2009 PGA championships was down. This year, the tour lost title sponsors Buick, U.S. Bank and Stanford Financial.
The International Olympic Committee is still looking for two more international sponsors for the 2010 Vancouver Olympics, leaving organizers with a $30-million gap in what they expected to receive. (In an unprecedented move, on Aug. 26, the IOC promised to cover a budget shortfall, if necessary.)
Smaller events are affected, too. This summer's Canada Cup, an international women's fastball tournament, hosted in Surrey, B.C., brought in 25% less sponsorship dollars than last year. It lost McDonald's but luckily managed to pick up Boston Pizza and some other smaller companies.
"We've had great sponsors. It's just the times. People aren't giving away money in a tight economy," says Glen Todd, chairman of the Canada Cup organizing committee.
Despite the trend, the sponsorship department at Maple Leaf Sports & Entertainment has signed seven new multiyear partnerships with companies such as MasterCard Canada, Bruce Power and grocer Metro.
Like many other sports organizations, MLSE has had sponsorship turnover this year, with long-time sponsors such as Sony and Home Depot not renewing.
David Hopkinson, senior vice-president, corporate and community partnerships at MLSE, attributes the new sponsor partnerships to a change in strategy.
"There's a move away from simple signage to integrated programming," he says.
Signage is still part of the deals, he says, but the emphasis has shifted to an opportunity to demonstrate corporate social responsibility.
Indeed, MasterCard decided to change its approach to sponsorship about a year ago. "It's not just about branding anymore-- it's about providing experiences for the community," explains Lilian Tomovich, vice-president of brand marketing for MasterCard Canada.
That's why the credit card company decided to sponsor the new MasterCard Centre for Hockey Excellence in Toronto.
The three NHL-size rinks and one Olympic-size rink, which officially were opened this week, will serve as the practice facility for the Leafs and Marlies, but will also be used by the community.
MasterCard will be donating 250 hours of ice time each year. There will be free open skates for students on professional development days and for families on Saturdays.
"It's tough economic times for a lot of families. To give these families' kids the chance to skate to where the Leafs and Marlies practice is something we want to do," Ms. Tomovich says.
Similarly, Bruce Power signed on with MLSE this year to be the title sponsor of the Toronto Maple Leafs Skate for Easter Seal Kids. It will also support MLSE's Autism Awareness Nights at Air Canada Centre. Mr. Hopkinson says it's a multi-million dollar commitment over five years.