The Commencement of Modern Sport Sponsorship in the 1850s 1950s

Sanghak Lee, Indiana University

Lawrence W. Fielding, PhD (advisor), Indiana University
Abstract
Sport sponsorship has grown very !ickly in the last "# years and $eco%e a co%%on
$!siness practice &or %ost co%panies. 'eenaghan (()*") pointed o!t that co%%ercial
sponsorship has rapidly grown since the ()+#s and sport sponsorship &or%ed +# percent o& all
sponsorship activities. In addition, 'eenaghan proposed that the rapid growth o& co%%ercial
sponsorship was attri$!ta$le to a reg!lation o& to$acco advertising, pop!larity o& televised
sport ga%es, etc. ,owever, there were sponsorship e-a%ples even in the .o%an /%pire and
.enascence periods. 0dditionally, a railroad co%pany sponsored the ,arvard12ale regatta in
(*34 (S%ith, ()**). 0s a res!lt, it is apparent that sport sponsorship had e-isted $e&ore the
()+#s. Un&ort!nately, there is no research that has e-a%ined $oth the history and the
characteristics o& %odern sport sponsorship in the (*3#s to ()3#s.

5here&ore, the p!rpose o& the st!dy is to hypothesi6e why sport sponsorship appeared in the
()
th
cent!ry, and how sport sponsorship in the %odern era di&&ers &ro% c!rrent sport
sponsorship practices. 0&ter reviewing early sport sponsorship e-a%ples in prior st!dies, this
paper proposes that the necessary conditions o& %odern sport sponsorship had &or%!lated $y
(() a de%and &or pro%otion ca!sed $y a s!rpl!s o& goods, (4) an introd!ction o& %ass %edia,
and (") a pop!larity o& sports. 7e-t, %odern sport sponsorship cond!cts &or an ass!rance o&
!ality o& sponsoring (or endorsing) prod!cts, while c!rrent sport sponsorship e-ec!tes &or
every kind o& %arketing p!rposes. So%e e-a%ples that were incl!ded were8 a sport cele$rity
endorsed sporting e!ip%ent and a!to%akers sponsored a!to races. 'ore e-a%ples o&
%odern sport sponsorship will $e provided.

Introduction
5he sport ind!stry has grown dra%atically over the last co!ple o& decades (Pedersen, 'iloch,
9 La!cella, 4##+). Sport sponsorship is one o& the key engines &or this growth as it provides
i%portant reven!e so!rces &or the sport ind!stry (Pedersen et al., 4##+: Schaa&, 4##;).
Worldwide, sponsorship reven!e in 4##* is pro<ected to $e =;".3 $illion co%pared to the
=(".; $illion in ())> (?'i-ed $ag,@ 4##+). In the United States and Aanada alone, sponsor
co%panies were predicted to spend =(>.* $illion in 4##*, co%pared to =*3# %illion only 4#
years ago (?'i-ed $ag,@ 4##+).
Uk%an (())3) de&ined sponsorship as &inancial s!pport &or a property in order to create
co%%ercial opport!nities and $!ild association with the property. 5his de&inition clearly
shows that co%panies (sponsors) invest %oney into sport tea%s and sport organi6ations &or
co%%ercial p!rposes s!ch as increasing sales. Based on the de&initions a$ove, &or the
p!rposes o& this st!dy, sponsorship is de&ined as &inancial s!pport &ro% a sponsor (a
co%pany) to a sponsee (a sport property) to achieve the sponsorCs %arketing o$<ectives.
Scholars have agreed that the %a<or sponsorship o$<ectives incl!de s!ch goals as increasing
$rand awareness, enhancing $rand i%age, and increasing sales (Lo!gh 9 Irwin, 4##(:
'adrigal, 4###: 'eenaghan, ()*": 5o%asini, Frye, 9 Stotlar, 4##;). Dinney (4##>) clai%ed
1
that enhancing $rand i%age was the key o$<ective a%ong the sponsorship goals.
'eenaghan (()*", ())*) s!ggested co%%ercial sponsorship has $een created $eginning in
the ()+#s. ,e also proposes that co%%ercial sponsorship is initiated $y (() reg!lation o&
to$acco and alcohol advertising, (4) incre%ent o& advertising cost, (") growth o& sportEleis!re
activates, and (;) pop!larity o& televised sport $roadcasts. Aornwell (())3) also disting!ished
co%%ercial sponsorship &ro% philanthropic giving and stressed the rapid growth o&
co%%ercial sponsorship in ()*#s and ())#s. She also clai%ed that the advertising
reg!lations &or to$acco and hard li!or and increasing leis!re ti%e as the contri$!tors o&
co%%ercial sponsorship growth. 0ltho!gh 'eenaghan and Aornwell ill!strated the dra%atic
growth o& co%%ercial sponsorship and reasons, prior st!dies have a &ew li%itations. First,
%any scholars, incl!ding 'eenaghan and Aornwell, divide sponsorship into only two eras8
philanthropic sponsorship $e&ore the ()+#s and co%%ercial sponsorship a&ter the ()+#s. 7e-t
and %ore i%portantly, the sport sponsorship activities $e&ore the ()+#s have re%ained al%ost
!nknown altho!gh there were so%e sponsorship activities (e.g., S%ith, ()**). For e-a%ple,
Fil$ert (()**) insisted that sport sponsorship &irst developed in the %id ()
th
cent!ry.
5here&ore, the p!rpose o& the st!dy is to hypothesi6e not only why sport sponsorship &irst
appeared in the ()
th
cent!ry, $!t how %odern sport sponsorship ((*3#s to ()3#s) di&&ers &ro%
c!rrent sport sponsorship practices. 5o s!pport the hypotheses, this paper will provide early
sport sponsorship e-a%ples. 5his st!dy is signi&icant given that this is the &irst atte%pt to
investigate early sport sponsorship practices &ro% the (*3#s to the ()3#s. It will also propose
hypotheses to e-plain this pheno%enon. 5he &ollowing section will introd!ce the origin o&
sponsorship which e-isted prior to the ()
th
cent!ry.
Origin of Sponsorship
0ltho!gh sponsorship is perceived as a %odern co%%ercial activity, sponsorship has $een
practiced since ancient ti%es. Fil$ert (()**) pointed o!t that AaesarCs gladiators o& >3 BA
were $elieved to $e the very &irst to engage in sponsorship in h!%an history. In other words,
Aaesar !tili6ed p!$licity e&&ects &ro% gladiatorial events to restrain political opponents.
Aornwell (())3) and Wolton (()**) noted that patronage, a practice that took place largely
d!ring the .enaissance, was itsel& a kind o& sponsorship activity. In this period (the (;th
cent!ry to the (+th cent!ry), %any patrons and donors s!pported painters, %!sicians and
inventors. For e-a%ple, since the 'edici Fa%ily s!pported Leonardo da Ginci, his artwork
and inventions can $e classi&ied as sponsorship. He&kins (()*;) also s!ggested that
Ahristopher Aol!%$!sC e-pedition, s!pported $y I!een Isa$ella o& Spain, %ay well $e
considered a type o& sponsorship activity.
,owever, these sponsorship activities that took place $e&ore the ()
th
cent!ry had distinctive
characteristics co%pared to c!rrent sponsorship activities. First, %ost sponsors (or patrons)
were %e%$ers o& the royalty or no$ility, not a part o& a speci&ic co%pany. Second, the
decision to %onetarily s!pport so%eone was largely dependent on the patronCs personal
interests or ho$$ies, not on co%panyCs co%%ercial o$<ectives. 5hird, d!e to the none-istence
o& %ass %edia, the e-pos!re o& sponsorship was very li%ited and !s!ally took place only $y
word o& %o!th. Lastly, &ew sport sponsorships were o$served. 5he pheno%enon o&
sponsorship has dra%atically changed in the ()
th
cent!ry, partic!larly in the period a&ter the
Ind!strial .evol!tion.
ecessar! Conditions for Modern Sport Sponsorship
In the ()
th
cent!ry, the &irst %oderni6ed sport sponsorship appeared in the United State (U.S.)
2
in (*34 wherein a railroad co%pany sponsored the 2ale vers!s ,arvard rowing race to
pro%ote their railroad a%ong the race spectators (S%ith, ()**). Later, Aoca1Aola and Dodak
were involved in the &irst %odern 0thens Jly%pics in (*)> K their advertise%ents were
approved to play thro!gho!t the progra% $ook (P!ig, 4##>). 0 &ew years later in ()(( the
&irst Indianapolis 3## was held, sponsored $y Firestone. Aonse!ently, it is !estioned why
sport sponsorship s!ddenly appeared in the ()
th
cent!ry. 5he a!thor proposes three necessary
conditions &or the appearance o& sport sponsorship8 (() a de%and &or pro%otion ca!sed $y a
s!rpl!s o& goods, (4) an introd!ction o& %ass %edia, and (") a pop!larity o& sports. First, the
ind!stry revol!tion and %ass prod!ction syste% in the ()
th
cent!ry prod!ced lots o& cons!%er
goods and created a s!rpl!s. In other words, co%panies sho!ld pro%ote their prod!cts to sell
and co%pete with other co%petitors. He&kins (()*;) said that ?advertising is necessary
whenever there is a s!rpl!s o& goods and !nknown %arket@ (p. iv) hence sport sponsorship.
,owever, sport sponsorship, as well as advertise%ent, cannot e-ist witho!t the develop%ent
o& %ass %edia which delivers the pro%otional %essages. 'ass %edia, especially newspapers,
$eca%e co%%on a%ong the p!$lic in the ()
th
cent!ry thanks to new inventions like the
Penny Press in the (*"#s. 5he Penny Press %ade newspapers cheaper to prod!ce and %ore
a&&orda$le to the p!$lic. Aonse!ently, newspapers $eca%e pop!lar and their circ!lation has
contin!ed to dra%atically increase since this period. .!ten$eck (())3) e-plained that the
n!%$er o& total newspaper co%panies has increased &ro% 3,#)( in (*+# to ),*(# in (**#. 0s
newspapers were $eco%ing %ore pop!lar, sport news was also $eco%ing %ore pop!lar to the
p!$lic. 0s a res!lt Hoseph P!lit6er !tili6ed sports as a &ront page attraction in the 7ew 2ork
World ever since (**" (Betts, ()3"). Jther new technology has also $een introd!ced, s!ch as
the telegraph in (*;;, the telephone in the (*>#s, the radiotelegraph in (*)3, and the radio in
the ()(#s. 5hese technologies also contri$!ted to the develop%ent o& %ass %edia. 0s a res!lt,
the develop%ent o& %ess %edia in the ()
th
cent!ry and in the early 4#
th
cent!ry paved the way
&or sport sponsorship.
Last and %ost i%portantly, sport sponsorship was %ade possi$le $eca!se o& the growing
pop!larity o& sports in the ()
th
cent!ry. 0ccording to F!tt%ann (4###), sports have $eco%e
pop!lar in the ()
th
cent!ry. 0s a res!lt o& !r$ani6ation and ind!striali6ation, $ase$all, &oot$all,
$o-ing and horse1racing $eca%e %!ch loved sports. (Lo$%eyer 9 Weidinger, ())4). 0t the
sa%e ti%e that sports were $eco%ing pop!lar a%ongst the p!$lic, co%panies were %ore
likely to associate their own $rand na%e with the sports. In s!%%ary, a de%and &or
pro%otional activities res!lting &ro% a s!rpl!s o& goods, a develop%ent o& %ess %edia, and a
growing pop!larity o& sports satis&ied the necessary conditions &or sport sponsorship in the
()
th
cent!ry. ,owever, the characteristics o& %odern sport sponsorship so%ewhat di&&er &ro%
the c!rrent sport sponsorship. 5he ne-t portion o& this paper will propose how the %odern
sport sponsorship di&&ers &ro% the c!rrent sport sponsorship.
"istinct Characteristics of Modern Sport Sponsorship
0s we disc!ssed in the previo!s section, sport sponsorship has $een a co%%on %arketing
co%%!nication tool since the ()+#s. 'ost $ig co%panies and organi6ations (&ro% Aoca1Aola
to the US 0r%y) are involved in sport sponsorship now. ,owever, %odern sport sponsorship
was so%ewhat di&&erent co%pared to c!rrent sponsorship activities when it co%es to (()
sponsorship o$<ectives, (4) sponsorship strategies, and (") participating sponsors. First,
%odern sport sponsorship &oc!ses %ore on ass!ring the !ality o& prod!cts, while c!rrent
sport sponsorship has vario!s o$<ectives (e.g., increasing $rand awareness, enhancing $rand
i%age, increasing sales). 0s a res!lt, endorse%ent, testi%onials, and o&&icial licensing were
the %ost co%%on strategies in %odern sport sponsorship. 0ct!ally, sport sponsorship is
3
considered a $etter co%%!nication tool to convince the p!$lic concerning the !ality o&
prod!cts over advertising ('eenaghan, 4##(). Beca!se sponsorship did not directly deliver a
co%%ercial %essage, a sponsorship %essage is !s!ally %ore credi$le to cons!%ers.
In addition, %ost sponsors in %odern sport sponsorship were directly related to sports. For
e-a%ple, sporting goods co%panies sponsored leag!es and players and a!to%akers
participated in a!to racing. 5he s!%%ary o& the distinctive characteristics $etween c!rrent
sport sponsorship and %odern sport sponsorship is ill!strated on 5a$le (.
5a$le (
Comparisons of sport sponsorship activities
A!rrent sport sponsorship 'odern sport sponsorship
Sponsorship
o$<ectives
0ll %arketing o$<ectives s!ch as
awareness, i%age, and sales
I!ality ass!rance
Sponsorship
strategies
'a-i%i6ing coverage
I%age congr!ence
/ndorse%ent
5esti%ony
J&&icial licensing
Participating
sponsors
0ll kinds o& co%panies
Ao%panies which directly related
to the sponsoring sports
/-a%ples
0ll kinds o& co%panies incl!ding
to$acco, alcohol, retailer, drink, &ood,
co%p!terEinternet, etc.
Sporting goods
0!to %o$ileE0!to%otive prod!cts
Patent %edicine
5o$acco
0 sporting goods co%pany is a good e-a%ple. Fielding and 'iller (())>) stated that the
proo& o& !ality was one o& the %ost i%portant %arketing goals &or %ost sporting goods
co%panies &ro% ()## to ()"#. 5here&ore, endorse%ents and o&&icial licensing were the
co%%on strategies to ass!re the !ality o& a prod!ct. For e-a%ple, as early as (*+* Spalding
!sed o&&icial $all strategies in $ase$all and other sports and %ade great s!ccess. 5he
Lo!isville Sl!gger also !sed a si%ilar %ethod to pro%ote their $ase$all $ats. 0ccording to
'iller, Fielding, and Pitts (())"), in ()#+, the Lo!isville Sl!gger had less than 4> percent o&
the %arket share while the leader, B!ster Brown, had a$o!t +; percent. ,owever, the
Lo!isville Sl!gger recogni6ed that their %ain cons!%ers, the 0%erican yo!th, were
concerned a$o!t the !ality o& $ats so they introd!ced the 0!tograph 'odel Sl!gger, in
()(;which was a!tographed $y &a%o!s $ase$all players s!ch as 5y Ao$$ and Ba$e .!th 5his
endorse%ent strategy was a h!ge s!ccess and the Lo!isville Sl!gger $eca%e a %arket leader
acco!nting &or >; percent o& the %arket share $y ()4".
Fro% the $eginning sponsorship has e-isted in a!to racing. 5he &irst a!to race was held in
(*); in France, ?Voitures sans chevarut@ %eaning horseless carriage (Boddy, ()++). 5his
&irst a!to race was organi6ed $y Pierre Fi&&ard Aowner o& a Paris news %aga6ine called Le
Petit Journal. ,e planned the race to ill!strate relia$ility, speed, and the sa&ety o& cars as
$eing &ar s!perior to the horse carriage. In other words, &ro% the &irst a!to race in history
!ality ass!rance o& cars $egan (Boddy, ()++: .endall, ())(). 0nother e-a%ple is two %en
$y the na%es o& Dai%ler and Ben6. Be&ore World War I they developed high !ality cars and
participated in races to pro%ote their cars (.endall, ())(). .endall also stated that tire, car
la%p, and &!el co%panies placed lots o& signage in the Lyons circ!it d!ring the ()4; French
Frand Pri-. In addition, 5ennant (4##;) showed the pict!re o& an a!to race in ()";, whose
4
signage incl!ded D!nlop, BP /thyl, Aastrol, /sso, and Shell.
In the U.S., a!to racing $egan d!e to a si%ilar reason8 !ality ass!rance. In the ()##s, %any
a!to%akers prod!ced cars in Indianapolis, like Detroit does today. 0ccording to Davison and
Sha&&er (4##>), the $iggest challenge o& a!to%akers was testing their vehicles. 5he &irst
&o!nder o& the Indianapolis 'otor Speedway (I'S), Aarl Fisher, proposed a track and
rando% races not only to test cars $!t also to sell cars. In other words, Fisher pro<ected that
people wanted to $!y the stripped1down versions o& racing cars. In s!%%ary, the %a<or
%otivation to participate in a!to racing &or a!to%akers and a!to%otive prod!ct %akers in the
late ()
th
cent!ry and early 4#
th
cent!ry was to show relia$ility, !ality and s!perior
per&or%ance o& their prod!cts.
Be&ore the First World War, patent %edicines and the to$acco ind!stry also ill!strated healthy
or e-citing i%ages associated with athletes (Segrave, 4##3). Segrave prod!ced one
sponsorship e-a%ple which incl!ded si- &a%o!s $ase$all players endorsing to$acco and the
5!-edo, and said ?Base$all and the 5!-edo %ake a per&ect co%$ination.@ In s!%%ary,
!ality ass!rance was the %ain o$<ective in %odern sport sponsorship and endorse%ent,
testi%onials and o&&icial licensing were the %ost co%%on ways o& sponsorship.
Conc#usions and #imitations
0&ter reviewing early e-a%ples o& prior sport sponsorship research, the c!rrent st!dy
proposed a necessary condition8 why sport sponsorship appeared in ()
th
cent!ry. 'odern
sport sponsorship e-ists d!e to (() a de%and &or pro%otion ca!sed $y a s!rpl!s o& goods, (4)
an introd!ction o& %ass %edia, and (") a pop!larity o& sports. 7e-t, %odern sport sponsorship
has distinct characteristics co%pared to c!rrent sport sponsorship whose %ain o$<ective is the
ass!rance o& !ality sponsoring (or endorsing) prod!cts. 5here&ore, endorse%ent, testi%ony,
and o&&icial licensing were the co%%on sponsorship practices and %ost sponsors were
directly related to the sporting events. 5he sporting goods ind!stry and a!to%akers were the
$est e-a%ples in order to e-plain the %odern sport sponsorship pheno%enon.
,owever, this st!dy also has so%e li%itations. First, this st!dy %ostly looked at sporting
goods ind!stry and a!to%akers. 0nother ind!stry having di&&erent sponsorship activities
%ight show di&&erent characteristics. 7e-t, the c!rrent st!dy only investigates secondary
so!rces. Using pri%ary so!rces s!ch as sponsorship advertise%ents in pop!lar newspapers or
%aga6ines wo!ld provide %ore convincing in&or%ation. ,ence, the !se o& pri%ary so!rces
and the investigation o& another ind!stry as it relates to sport sponsorships wo!ld $e a good
topic &or a &!t!re st!dy.
$eferences
Betts, H. (()3"). 5he technological revol!tion and the rise o& sport, (*3#1()##. Mississippi
Valley Historical Review, 40(4), 4"(143>.
Boddy, W. (()++). The history of motor racing 7ew 2ork8 P!tna%.
Aornwell, 5. B. (())3). Sponsorship1linked %arketing develop%ent. !port Mar"eting
#uarterly$ 4(;), ("14;.
Davison, D., 9 Sha&&er, .. (4##>). %utocourse official history of the &n'ianapolis (00
Silverstone, 7orthants, United Dingdo%8 Arash 'edia Fro!p
Fielding, L. W., 9 'iller, L. D. (())>). 0dvertising and the develop%ent o& cons!%er
p!rchasing criteria8 5he sporting goods ind!stry, ()##1()"#. !port Mar"eting
#uarterly$ ((;), "+13#.
5
Fil$ert, D. (()**). Sponsorship strategy is adri&t. The #uarterly Review of Mar"eting$ )4$ >1
).
F!tt%ann, 0. (4###). 5he develop%ent o& %odern sports. In H. Aoakley 9 /. D!nning (/ds.),
Han'*oo" of !port !tu'ies (pp. 4;*143)). London8 Sage.
He&kins, F. (()*;). %'vertising to'ay. London8 International 5e-t$ook.
Dinney, L. (4##>). Sport sponsorship. In 0. 0. .aney 9 H. Bryant (/ds.), Han'*oo" of !ports
an' Me'ia (pp. 4)31"(#). 'ahwah, 7H8 Lawrence /rl$a!%.
Lo$%eyer, ,., 9 Weidinger, L. (())4). Ao%%ercialis% as a do%inant &actor in the 0%erican
sports scene8 So!rces, develop%ents, perspectives. &nternational Review for the
!ociology of !port, +,(;), "#)1"4+.
Lo!gh, 7., 9 Irwin, .. (4##(). 0 co%parative analysis o& sponsorship o$<ectives &or U.S.
wo%enLs sport and traditional sport sponsorship. !port Mar"eting #uarterly$ )0$ 4#41
4((.
'adrigal, .. (4###). 5he in&l!ence o& social alliances with sports tea%s on intentions to
p!rchase corporate sponsorsL prod!cts. Journal of %'vertising$ +-(;), ("14;.
'eenaghan, 5. (()*"). Ao%%ercial sponsorship. .uropean Journal of Mar"eting$ ),(+), 31
+".
'eenaghan, 5. (())*). A!rrent develop%ents and &!t!re directions in sponsorship.
&nternational Journal of %'vertising$ ),$ "14*.
'eenaghan, 5. (4##(). Understanding sponsorship e&&ects. Psychology / Mar"eting$ )0$ )31
(44.
'iller, L. D., Fielding, L. W., 9 Pitts, B. F. (())"). 5he rise o& the Lo!isville Sl!gger in the
%ass %arket. !port Mar"eting #uarterly$ +("), )1(>.
'i-ed $ag8 Sponsorship spending to s!rge in C#*, $!t not everyone will $ene&it. (4##+,
Dece%$er 4;). &.1 !ponsorship Report$ +2(4;), (13.
Pedersen, P. '., 'iloch, D. S., 9 La!cella, P. A. (4##+). !trategic sport communication
Aha%paign, IL8 ,!%an Dinetics.
P!ig, H. '. (4##>). 3lympic mar"eting4 historical overview4 5niversity lectures on the
3lympics Bellaterra8 Aentre dC/st!dis JlM%pics (U0B). International Ahair in
Jly%pis% (IJA1U0B). .etrieved 'ay "#, 4##), &ro%
http8EEceo.!a$.esElecEpd&Ep!ig.pd&
.endall, I. (())(). The power an' the glory4 % century of motor racing London8 BBA Books.
.!ten$eck, H. (())3). 7ewspaper trends in the (*+#s8 Proli&eration, pop!lari6ation, and
political independence. Journalism / Mass Communication #uarterly, ,+(4), ">(1
"+3.
Schaa&, P (4##;). !port$ &nc4 )00 years of sports *usiness 0%herst, 728 Pro%ethe!s.
Segrave, D. (4##3). .n'orsements in a'vertising4 % social history He&&erson, 7A8 'cFarland
9 Ao.
S%ith, .. 0. (()**). !ports an' free'om. 7ew 2ork8 J-&ord University Press.
5ennant, H (4##;). Motor racing the gol'en age4 .6traor'inary images from )-00 to )-,0
London8 Jctop!s.
5o%asini, 7., Frye, A., 9 Stotlar, D. (4##;). 7ational Aollegiate 0thletic 0ssociation
corporate sponsor o$<ectives8 0re there di&&erences $etween Divisions I10, I100, and
I1000N !port Mar"eting #uarterly$ )7$ 4(>144>.
Uk%an, L. (()))). &.18s complete gui'e to sponsorship Ahicago8 I/F.
Wolton, A. (()**). 0rts sponsorship8 har%ony or discordN .uropean Research$ )2$ *+1);.
6
J$<ectives
5o instill a s!staina$le sporting c!lt!re, &oster a sense o& pride and social cohesion,
and to $ring tangi$le econo%ic $ene&its to o!r co%%!nity. 'a<or sports events
sho!ld also help enhance ,ong DongLs i%age as 0siaLs sports events capital
5o help OnationalO sports associations (7S0s) develop s!staina$le %a<or sports events
thro!gh greater participation and s!pport &ro% the co%%ercial sector as well as the
co%%!nity at large
5o s!pport 7S0s in sec!ring and hosting one1o&& %ega international sports events
considered $ene&icial to the co%%!nity
1.1 Sponsorship
An appropriate defnition of sponsorship is Sandlers as cited by
Papadimitriou (2008),
The provision of resources (money, people or euipment) by an or!anisation directly
lin"ed to
an event or activity in e#chan!e for a direct association to that event or activity$
Sponsorship is
one of the most important aspects of mar"etin! communications$ Sport is currently the
lar!est
industry to receive funds throu!h sponsorship$ %rom 200&'20&0 sponsorship by
corporations
has risen dramatically$ (t is di)cult to place an e#act value on the *+ sponsorship
industry, but
accordin! to +ey ,ote (20&0) mar"et reports the increase of ma-or sponsorship deals in
the *+
has -umped from ./0/m to .182m in the last decade$
3ne e#planation for the added industry value could be attributed to the availability of
sports
events on television across the lar!e pre'pay platforms$ Another factor could be the
commercialisation and commodifcation of sportin! events in !eneral$ 4oyle (2005)
described
elite sports as bein! vie6ed by corporations primarily as a tool for addin! brand
value$ +ey
,ote, September 2005)
Sponsorship can be used by lar!e corporations such as 7c8onalds to convey a
messa!e to their
consumer, there are a number of reasons 6hy an or!anisation 6ould consider
sponsorship9
To familiarise the name of a brand or company,
To reinforce corporate identity
To demonstrate !ood6ill, (f advertisin! is not an alternative
To attract media interest$ (:arrison, S$ 2000)
This study has attempted to e#plore 6hat 7c8onalds motivations are for sponsorin!
The
3lympic ;ames and 6hether the relationship has 6or"ed$
)n todays mar"etin! climate there are a number of sponsorship opportunities, these
span from
7
!rass root sponsorships e$!$ a hole on a !olf course up to the partnership
bet6een a company
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Introd!ction to Sports Sponsorship
By hicham30 | October 2010
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Introuction!
Bac"groun
In toay#$ bu$ine$$% com&anie$ are oing their be$t to reach con$umer$ through their min$ an
heart$ u$ing $&on$or$hi&$ a$ another 'ay to &romote their bran$ ()ei$mith% 1**4+, -$ efine by
.orn'e// et a/, 2005+% 0#1&on$or$hi&$ are a gro'ing communication form% an are efine by a $&on$or
(i,e, a bran or firm+ &ro2iing ca$h an3or other com&en$ation in e4change for acce$$ to an ob5ect#$
commercia/ &otentia/ (i,e, e4&o$ure an a$$ociation 'ith the cau$e% e2ent% organi$ation or ini2iua/
re/ate to a $&ort% cu/tura/% an3or non6&rofit entity+##, Benett (1***+ a$ that% 1&on$or$hi&$ 0#$ee" to
achie2e fa2ourab/e &ub/icity for a com&any an3or it$ bran$ 'ithin a certain target auience 2ia the
$u&&ort of an acti2ity not irect/y /in"e to the com&any7$ norma/ bu$ine$$, 1&on$or$hi& it$e/f of
cour$e% can ta"e 2ariou$ form$ ranging from a re/ati2e/y crue /e2e/ of financia/ $u&&ort that ha$ a
/imite a$$ociation 'ith the braning $trategy of the $&on$or an 'hich might be $ai to borer on the
&hi/anthro&ic (8'inner an 1'an$on% 2003+% to a far more e/aborate integration 'ithin a bran $trategy
$o that the re/ation$hi& may be e$cribe a$ ta"ing on a co6braning etho$ (9otion et a/,% 2003+, It
a/$o cou/ be uner ifferent form$% t2 a2erti$ement an a// ty&e$ of 2i$ua/$,## -ccoring to -"aoui
(2007+% it#$ e$timate that the annua/ 'or/'ie $&ening on $&on$or$hi&$ ha$ reache the amount of
:33 bi//ion% an a&&ro4imate/y t'o6thir$ of a// $&on$or$hi& $&ening i$ irecte at $&orting e2ent$%
/eague$% team$% an &/ayer$ (.rom&ton% 2004; <erity% 2002+, In the =nite 1tate$ 1&on$or$hi&
e4&eniture$ in the =1 'ere e$timate at :11,14 bi//ion in 2004 (I>8% 2004% cite in 1eguin% ?ee% @
O7Aei//y% 2005+, 1ub$tantia/ e4&eniture$ ha2e a/$o been re&orte (1tot/ar% 2004+ in >uro&e (:7,4
bi//ion+?he abo2e mentione figure$ e4&/ain 'hy $&on$or$hi& an e2ent mar"eting ha2e become one of
the fa$te$t gro'ing area$ of &romotion,
*
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Sponsor (co%%ercial)
Brom Ci"i&eia% the free encyc/o&eia
.or&orate /ogo$ $ho'ing D-1.-A team $&on$or$,
5o sponsor so%ething is to s!pport an event, activity, person, or organi6ation &inancially or
thro!gh the provision o& prod!cts or services. 0 sponsor is the individ!al or gro!p that
provides the s!pport, si%ilar to a $ene&actor.
Contents
1 Eefinition
2 ?heorie$ of $&on$or$hi&
3 8/oba/ $&on$or$hi& mar"et
o 3,1 1&on$or$hi& in the =nite Fingom
o 3,2 1&on$or$hi& in Dorth -merica
4 1e//ing $&on$or$hi&
5 Ge2eraging $&on$or$hi&$ an acti2ation
6 .ategorie$
7 1ee a/$o
8 Aeference$
Defnition
Sponsorship
P(Q
is a cash andEor in1kind &ee paid to a property (typically in sports, arts,
entertain%ent or ca!ses) in ret!rn &or access to the e-ploita$le co%%ercial potential
associated with that property, according to I/F.
While the sponsoree (property $eing sponsored) %ay $e nonpro&it, !nlike philanthropy,
sponsorship is done with the e-pectation o& a co%%ercial ret!rn.
While sponsorship can deliver increased awareness, $rand $!ilding and propensity to
p!rchase, it is di&&erent &ro% advertising. Unlike advertising, sponsorship can not
co%%!nicate speci&ic prod!ct attri$!tes. 7or can it stand alone, as sponsorship re!ires
s!pport ele%ents.
Theories of sponsorship
0 range o& psychological and co%%!nications theories have $een !sed to e-plain how
co%%ercial sponsorship works to i%pact cons!%er a!diences. 'ost !se the notion that a
$rand (sponsor) and event (sponsoree) $eco%e linked in %e%ory thro!gh the sponsorship and
as a res!lt, thinking o& the $rand can trigger event1linked associations, while thinking o& the
event can co%e to trigger $rand1linked associations. Aornwell, Weeks and .oy (4##3)
P4Q
have
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p!$lished an e-tensive review o& the theories so &ar !sed to e-plain co%%ercial sponsorship
e&&ects.
Jne o& the %ost pervasive &indings in sponsorship is that the $est e&&ects are achieved where
there is a logical %atch $etween the sponsor and sponsoree, s!ch as a sports $rand sponsoring
a sports event. Work $y Aornwell and colleag!es
P"Q
however, has shown that $rands that donLt
have a logical %atch can still $ene&it, at least in ter%s o& %e%ory e&&ects, i& the sponsors
artic!lates so%e rationale &or the sponsorship to the a!dience.
Global sponsorship market
I/F pro<ects spending on sponsorship glo$ally to grow 3.4 percent in 4#(( to =;>." $illion.
S!$tracting e-pendit!res $y 7orth 0%erican co%panies, the rest o& the worldCs sponsors
spent =4).( $illion on partnerships in 4#(# and I/F pro<ects that s!% to increase ;.* percent
to ="#.3 $illion in 4#((.
/!rope will re%ain the largest so!rce o& sponsorship spending apart &ro% 7orth 0%erica,
&ollowed $y the 0sia Paci&ic region. Frowth in Aentral and So!th 0%erica d!ring 4#(# did
not %ateriali6e to the e-tent pro<ectedR".* percent vers!s a &orecast o& 3.+ percentRdespite
the FIF0 World A!p and Jly%pic Fa%es in Bra6il in 4#(; and 4#(>, respectively. With the
4#(# World A!p concl!ded, sponsorship activity sho!ld $egin to heat !p, th!s the region is
pro<ected to $e the &astest1growing so!rce o& sponsorship dollars o!tside o& 7orth 0%erica,
with a &orecast growth rate o& 3.> percent &or 4#((.
?he e4am&/e$ an &er$&ecti2e in thi$ $ection may not represent a worldwide view of the
subject, P/ea$e im&ro2e thi$ artic/e an i$cu$$ the i$$ue on the ta/" &age, (1e&tember
2013+
5he Fer%an initiative S4#
P;Q
has $een esta$lished in 4##+ in order to de&ine a sta$le
&ra%ework &or the sponsorship ind!stry in Fer%any.
Sponsorship in the United Kingdom
.ela-ed television ind!stry legislation s!rro!nding prod!ct place%ent has led to a s%all $!t
increasing rise in sponsorship in the UD.
P3Q

Sponsorship in North America
I/F Sponsorship .eport, which has cond!cted pri%ary research on sponsorship spending
ann!ally since ()*;, pro<ects =(*.4 $illion will $e spent $y co%panies in 7orth 0%erica on
rights &ees in 4#((, !p 3.4 percent over 4#(#. Sponsorship e-pendit!res $y 7orth 0%erican
co%panies grew ".) percent in 4#(# to =(+.4 $illion.
0s it has in %ost years over the past two1pl!s decades, sponsorshipCs growth rate will $e
ahead o& the pace e-perienced $y advertising and sales pro%otion, according to I/F. 7orth
0%erican %edia spending, which rose two percent in 4#(#, is pro<ected to increase ".)S in
4#((, according to the worldwide %edia and %arketing &orecast prod!ced $y Fro!p', the
glo$al %edia invest%ent %anage%ent operation o& WPP Fro!p plc. (Fro!p' is the parent
co%pany o& I/F S. p!$lisher I/F, LLA.)
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Aons!%er and $!siness1to1$!siness pro%otional spending did not increase in 4#(#, declining
&or the second year in a rowRaltho!gh the drop o& "." percent was an i%prove%ent &ro% the
decrease o& +.( percent in 4##), according to the Ao%%!nications Ind!stry Forecast 4#(#1
4#(; p!$lished $y private e!ity &ir% Geronis S!hler Stevenson. GSS pro<ects that pro%otion
spending will $e &lat in 4#(( co%pared to 4#(#
7orth 0%erican corporate spending on ca!se sponsorships grew at the highest rate o& the si-
%a<or property sectors in 4#(#R>.+ percentRas %arketers so!ght to earn goodwill &ro%
cons!%ers and other stakeholders still recovering &ro% the recessionary econo%y, according
to I/F research.
5he largest seg%entRsportsRgrew ".; percent in 4#(#, as a +.> percent <!%p in spending on
the &o!r %a<or U.S. pro sports leag!es and their tea%s was dragged down $y little or no
growth a%ong other types o& sports, incl!ding a!to racing. For 4#((, contin!ed interest in
%a<or sports properties sho!ld drive category spending eno!gh to %ake it the &astest1growing
seg%ent, as ca!se spending cools down to a still respecta$le growth rate o& &ive percent.
5he category that grew the least in 4#(#, the arts at <!st 4.+ percentRsho!ld i%prove in 4#((
to a 3.( percent increase, as its two largest sponsor categoriesRa!to%otive and &inancial
servicesRcontin!e to see i%proved overall &ort!nes and t!rn the sponsorship spigot $ack on.
Selling sponsorship
5he sales cycle &or selling sponsors is o&ten a lengthy process that consists o& researching
prospects, creating tailored proposals $ased on a co%panyLs $!siness o$<ectives, &inding the
right contacts at a co%pany, getting $!y1in &ro% %!ltiple constit!encies and &inally
negotiating $ene&itsEprice. So%e sales can take !p to a year and sellers report spending
anywhere $etween (K3 ho!rs researching each co%pany that is viewed as a potential prospect
&or sponsorship.
P>Q

Leveraging sponsorships and activation
5hese are the ter%s !sed $y %any sponsorship pro&essionals, which re&er to how a sponsor
!ses the $ene&its they are allocated !nder the ter%s o& a sponsorship agree%ent. Leveraging
has $een de&ined $y Weeks, Aornwell and Drennan (4##*) as Othe act o& !sing collateral
%arketing co%%!nications to e-ploit the co%%ercial potential o& the association $etween a
sponsor and sponseeO while activation has $een de&ined as those Oco%%!nications that
pro%ote the engage%ent, involve%ent, or participation o& the sponsorship a!dience with the
sponsor.O
P+Q

'oney spent on activation is over and a$ove the rights &ee paid to the sponsored property and
is o&ten &ar greater than the cost o& the rights &ee.O
P+Q

Categories
?it/e $&on$or i$ highe$t $tatu$ of $&on$or$hi&, It characteriHe$ the mo$t $ignificant
contribution to a com&any in organiHing an ho$ting an e2ent, Often the name of $uch $&on$or
i$ &/ace ne4t to the name of com&etition% team$% ini2iua/ ath/ete$ an i$ a$$ociate 'ith it
(for e4am&/e% the /ogo of a tit/e $&on$or i$ &/ace on a uniform of footba// c/ub team$+, ?he
$tatu$ of a tit/e $&on$or a/$o a//o'$ to ha2e a eci$i2e 2oice on the i$$ue of &re$ence among
$&on$or$ other com&anie$ o&erating in the $ame bu$ine$$% the &riority right to u$e &/ayer$
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an coache$ for conucting 5oint &romotion$% right of &re$ence at a// officia/ e2ent$ eicate
to a $&ort$ e2ent% manatory mentioning in a// acti2itie$ conucte on beha/f of the team%
high/ighting the name of tit/e $&on$or in fi/m creit$% te/e2i$ion &rogram$ 'hich 'ere create
'ith it$ financia/ $u&&ort% &/acement of /ogo$ an banner$, In ca$e of tit/e $&on$or7$ &re$ence
the genera/ $&on$or &o$ition may remain free,
8enera/ $&on$or i$ a $&on$or that ma"e$ one of the /arge$t contribution$ (in ab$ence of a tit/e
$&on$or 6 u$ua//y more than 50I of a// $&on$or$hi& fun$ rai$e+ an that recei2e$ for it the
right to u$e the image of com&etition a$ 'e// a$ e4ten$i2e meia co2erage, If nece$$ary% the
$tatu$ of the genera/ $&on$or may be $u&&/emente by the genera/ $&on$or$ for certain
categorie$% a$ 'e// a$ the main $&on$or,
Officia/ $&on$or i$ a $&on$or that ma"e$ a certain &art of rai$e fun$ ('ithin 20625I+,
?y&ica//y% the gi2en $tatu$ may be grante by category (Jofficia/ in$urance &artnerJ% Jofficia/
automoti2e &artnerJ% etc,+,
?echnica/ $&on$or i$ a $&on$or 'hich &romote$ organiHation of $&orting e2ent$ through the
&artia/ or fu// &ayment of goo$ an $er2ice$ (e,g,% meica/ eKui&ment% fitne$$% organiHation of
tran$&ortation an /oging+,
Partici&ating $&on$or i$ a com&any% the $&on$or$hi& fee $iHe of 'hich u$ua//y oe$ not e4cee
10I of tota/ rai$e fun$,
Informationa/ $&on$or i$ an organiHation that &ro2ie$ informationa/ $u&&ort through meia
co2erage% conucting PA6action$% 5oint action$% etc,
See also
9ar"eting
-2erti$ing
Eonation
.au$e mar"eting
-mbu$h mar"eting
Daming right$
1&ort$ mar"eting
1u$taining &rogram
>uro&ean 1&on$or$hi& -$$ociation
1&on$or$hi& bro"er
Gi$t of $&on$ore $&ort$ $taium$
Gi$t of $&on$ore team$
References
1, I>8! 1&on$or$hi& 8/o$$ary
2, .orn'e//% ?, B,% Cee"$% ., 1,% @ Aoy% E, P, (2005+, 1&on$or$hi&6/in"e mar"eting!
O&ening the b/ac"bo4, Lourna/ of -2erti$ing% 34% 21642,
3, .orn'e//% ?, B,% )um&hrey$%9, 1,% 9aguire%-, 9,%Cee"$% ., 1,% @ ?e//egen% ., G,
(2006+, 1&on$or$hi&6/in"e mar"eting! ?he ro/e of articu/ation in memory, Lourna/ of .on$umer
Ae$earch% 33% 312M321,
4, 1 20 (German)
5, 1&on$or$hi& AeKue$t$
6, N1O
7, Cee"$% .,1,% .orn'e//% ?,B,% Erennan% L,., (2008+, Ge2eraging $&on$or$hi&$ on the
internet! -cti2ation% congruence% an articu/ation, P$ycho/ogy an 9ar"eting% 25% 637654
16
The Significance of Sponsorship as a
Marketing Tool in Sport Events
Jlad!nni .oselyn 0$iod!n
Eegree
D/F.// 5,/SIS
0rcada
Degree Progra%%e8 International B!siness
Identi&ication n!%$er8
0!thor8 Jlad!nni .oselyn 0$iod!n
5itle8 5he signi&icance o& sponsorship as a
%arketing tool in sport events
S!pervisor (0rcada)8 Sveinn /ldon
Ao%%issioned $y8 1
0$stract8
Sports sponsorship is a %arketing tool that is &re!ently !sed $y co%panies to reach a wide
a!dience on a glo$al $asis so as to $e placed higher than their co%petitors and to create
awareness as well as %ake a higher pro&it %argin. 5hro!gh this plat&or%, speci&ic target
a!dience alongside potential c!sto%ers are reached as it a$le to penetrate thro!gh !ite
e&&ectively in the pro%otional %i- and as s!ch, is a signi&icant %ethod $eing !sed $y %any
organisations.
5he ai% o& this thesis was to gain a deeper !nderstanding o& how co%panies !se
sponsorship in sport events as a strategic tool in their %arketing progra%. In order to
achieve this p!rpose, the thesis descri$es and e-plains co%panies o$<ectives with sport
sponsorship, the threats $eing enco!ntered $y its !sage and the reasons why co%panies
decide to sponsor.
5he theory o& the thesis was collected &ro% vario!s sponsorship literat!res that incl!ded
$oth $ooks and article <o!rnals. 0dditional in&or%ation was o$tained &ro% %arketing and
$randing literat!re.
5he e%pirical st!dy was cond!cted $y interviews. 0 co%panyCs personnel, the city o&
,elsinki event o&&ice. Interview !estions were $ased on the theory !sed in the pro<ect and
the interviews provided in&or%ation on the reasons why co%panies decide to go into
sponsorship agree%ent with a sport event.
5he &indings showed that co%panies are not too keen on taking risks !nnecessarily and are
willing to sponsor vario!s target seg%ents $eca!se o& the good i%age and a wider a!dience
range.
5he concl!sions were $ased on the answers given d!ring the interviews and the co%panies
pre&er to go into sponsorship that can convey their $rand i%age e&&ectively.
Deywords8 Sponsorship, .elationship 'arketing,
Brands
7!%$er o& pages8 34
Lang!age8 /nglish
Date o& acceptance8 #3.(4.4#(#
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1 INTRODUCTION
For %any years sponsorship and sports %arketing have $een in e-istence and has now $een
greatly i%proved !pon. ,ardly can organi6ers o& %a<or events e-pect to receive so%e &!nds
witho!t e-pecting to give so%ething $ack in ret!rn. 0 co!ple o& years ago, sponsorship co!ld $e
regarded has %ore charita$le or philanthropic, $!t in recent years, that has changed signi&icantly
has we will see in the co%ing chapters.
,ardy, '!llin and S!tton (4##+, p. "(3) de&ines the ter% sponsorship as Tthe ac!isition o& rights
to a&&iliate or directly associate with a prod!ct or event &or the p!rpose o& deriving $ene&its
related to that a&&iliation or association. 5he sponsor then !ses this relationship to achieve its
pro%otional o$<ectives or to &acilitate and s!pport its $roader %arketing o$<ectivesC.
Skinner and .!kavina (4##4, p. --) points o!t that the Jly%pics held in Los 0ngeles was a rapid
%arket e-pansion &or sponsorship deals. 5he eventCs organi6ers where a$le to raise over =;##
%illion worth o& sponsorship deal which opened the doors &or other Jly%pics as well as other $ig
events s!ch as the FIF0 World A!p.
In recent ti%es, %any new opport!nities have opened !p &or co%panies to co%pete with one
another in creating sponsorship deals that is $oth &avo!ra$le to the% as well as the sporting
entities they get involved with.
1.1 Backgron!
'any co%panies nowadays are &!lly aware o& the &act that they need their c!sto%ers to stay in
$!siness and %any o& the% know the high signi&icance which %arketing plays in %aking the%
co%pete s!ccess&!lly a%ongst their co%petitors. Ao%panies need to satis&y their c!sto%ers $y
creatively %anaging their %arketing %i- in order to have a co%petitive advantage over others
(Ho$$er 4##+, pp. +)"1+);).
Pro%otion is the way &or the co%pany to co%%!nicate with their target a!diences thro!gh %ass
co%%!nication (Ho$$er 4##+, p. 4(). Pro%otion, however, incl!des %!ch %ore than the
traditional &or%s o& advertising. It involves all &or%s o& co%%!nication to cons!%ers. For %any
organi6ations, sports are !ickly $eco%ing a rather e&&ective and )
e&&icient way to co%%!nicate with $oth c!rrent and potential target %arkets (Shank 4##), p.
4>").
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1*