Wednesday 7 December 2016

Time for sponsors to clean up sport's tainted image

With the global sports sponsorship market worth €39bn, should backers have a bigger role within sporting organisations such as the OCI?

John McGee

Published 21/08/2016 | 02:30

'This is not what sponsors signed up for -but it's the unwitting and grim reality of what Team Ireland's benefactors got as soon as the Rio police knocked on Pat Hickey's bedroom door at 6.30am on Wednesday morning'. Photo: Getty/AFP
'This is not what sponsors signed up for -but it's the unwitting and grim reality of what Team Ireland's benefactors got as soon as the Rio police knocked on Pat Hickey's bedroom door at 6.30am on Wednesday morning'. Photo: Getty/AFP

Another week, another sports scandal - and somewhere another sponsor feverishly fretting about the possible damage it could unleash on their brand, its reputation, and possibly even their own careers.

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Welcome to the exciting and often nerve-wracking world of sports sponsorship, where huge sums of money slosh around the global sports industry as brands seek to align themselves with athletes, teams and the billions of sports fans around the world.

It is estimated that the value of the global sports market was worth around €130bn in 2015. Around 45pc of this, or €58.5bn, was in the form of gate receipts and merchandising, while €32.5bn is attributable to income from TV and other media rights. Sponsorship income, however, accounted for a whopping €39bn or 30pc of this €130bn, a figure which is growing year-on-year as the cheques get bigger and the financial needs of sporting organisations increase significantly.

However, despite the huge sums involved, sports sponsorship does carry with it certain risks - as the string of events that kept on unfolding last week at the Olympics in Brazil clearly demonstrate.

No company wants its brand to be associated with the unedifying and grubby spectacle of a naked 71-year old sports chief being led away from his hotel bedroom by police.

This is not what sponsors signed up for -but it's the unwitting and grim reality of what Team Ireland's benefactors (including the likes of Electric Ireland, New Balance, Kellogg's, Kia Motors and yogurt-maker Muller) got as soon as the Rio police knocked on Pat Hickey's bedroom door at 6.30am on Wednesday morning. Jokes about choking on their cornflakes aside, it's fair to say that it hasn't been a good week for these sponsors. Despite their best intentions, largesse and their desire to support athletes who are worthy of support, a lot of this investment and hard work over the past 12 months has been seriously undermined and completely overshadowed by this tawdry debacle.

But it doesn't have to be this way.

As we have seen with the serious fall-out from the financial shenanigans at FIFA over the last two years, there's nothing like the whiff of money - or the prospect of losing it - to concentrate the minds of sports organisations and the financial clout that sponsors can wield, should they choose, can be considerable. Harnessed properly and effectively, it can, and should, be used to effect cultural change within the sporting organisations they are supporting.

But sponsors can also bring to the table their expertise and knowledge while at the same time encouraging, if not insisting on, greater transparency, accountability and compliance with better corporate governance practices. In many sporting organisations, these are sadly lacking.

Equally, sponsors and their brands have a duty to their own companies to ensure that their sponsorship arrangements deliver a return on investment while at the same time fitting in with their own brand values and ensuring that the brand equity they have built up is not eroded or tainted by the company that they keep.

Of course, all of this may be just wishful thinking. Indeed, there's plenty of examples of sponsors turning a blind eye to past transgressions, says Jamie Macken, a partner in the sponsorship agency Livewire.

"Size matters - and brands like Nike, Head and Evian have all backed Maria Sharapova despite her two-year suspension for failing a drugs test. Unfortunately, we have all become relatively accustomed to doping and corruption in sport, but the fact remains that Maria Sharapova is a very powerful marketing platform.

"This is no different to the issues at FIFA and UEFA. Despite the negative publicity sponsors and advertisers still invested significant sums to be associated with Euro 2016. Why? Because sport delivers huge numbers of eyeballs and taps into our emotions like little else," he says.

But there is a growing disillusionment amongst sports fans and recent events have further eroded any semblance of trust that was left in a lot of sporting organisations like FIFA, UEFA, and now the OCI.

"There is a need to rally all sport's stakeholders - including sponsors and media - to the clean sport cause," says John Trainor, CEO of sponsorship consultancy Onside.

"The tide is turning in 2016 for how sponsors globally are being challenged to take a new stand on 'dirty sport' and it creates a provocative new opportunity for smarter sponsors to really change the sponsorship rulebook, and make a real difference in this landmark decade for cleaning up sport," he says.

In the meantime, the heroics of Paul and Gary O'Donovan and Annalise Murphy will be celebrated on TV and radio chat shows for weeks to come and they will feature in many PR photo shoots for God knows how long - but, sadly, the 2016 Olympic Games in Rio will be remembered for all the wrong reasons.

Somebody was literally caught with their trousers down.

Sunday Indo Business

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