November 18, 2010: Although teams, marketers and fans are still feeling the effects of, and adjusting to the ramifications of, a challenging economy, there are signs that the light at the end of the tunnel is getting closer. A major case in point: The NFL, NBA, MLB and NHL and their respective teams are projected to post a 7.6% increase in sponsorship revenue in 2010, reaching $2.28 billion, according to IEG, Chicago, a leading research and marketing firm specializing in domestic and global sponsorship.
The rise in spending marks a significant rebound from 2009, when those same entities saw a drop of 3.9% in total sponsorship revenue to $2.12 billion in the face of a struggling economy.
“The four major pro sports leagues and their teams have largely regained their sponsorship footing after a devastating 2009,” William Chipps, senior editor of the 2010 IEG Sponsorship Report, said in a statement.
Spending at the team level also has increased this year, "driven in part by renewed spending in the automobile category, as well as from financial services," according to IEG Sponsorship Report. The NHL is expected to show the largest increase among the big four sports, with spending on the league and its member clubs rising 9.4% to $327 million. However, the NFL has the largest sponsorship pot (up 7% to $870 million), followed by MLB (up 6.6% to $548 million) and the NBA (up 8.5% to $536 million).
According to Chipps, the rebound in spending can be attributed to three primary factors: Pent-up demand after two years of corporate belt tightening, the availability of previously unmarketed inventory and a resurgence in spending by the financial services category.
In fact, IEG said that when the Sponsorship Report is released at the end of December with a full review of the year in sponsorship, the "higher than expected growth in pro sports will almost certainly drive actual spending for the entire sports category, much higher than the 2.8% increase projected at the beginning of the year, even if the fortunes of amateur sports, auto racing and other pro sports such as golf and tennis lag behind."
IEG pointed to numerous new alliances in sports to support its projection, including a multi-layered deal between the NHL and Discover Financial Services; a pact between the NBA and financial firm BBVA; MLB’s new partnerships for 2010 such as The Scotts Co. and Bridgestone Americas' Firestone tire brand; and the NFL signing Barclaycard US, Papa John’s and Anheuser-Busch replacing Molson Coors Brewing as the league's official beer sponsor in a deal that does not begin until 2011.
IEG also cited the current difficulties between Anheuser-Busch and MLB to support its analysis of the strong state of sports sponsorship deals. Anheuser-Busch last week filed suit against MLB claiming the league wanted to change the terms of a deal agreed upon in April that would renew the brewer's status as official beer sponsor. A motivating factor: IEG valued the deal at $10 million a year, a $40 million gap behind the new six-year deal between Anheuser-Busch and the NFL that IEG valued at $50 million a year.