May 1 – With clubs and leagues scrambling to keep sponsors engaged, new research from the European Sponsorship Association (ESA) finds that while sponsors are changing their approaches during lockdown, there is confidence in the long-term health of the sponsorship industry despite short term uncertainty and a root and branch disruption caused by the Covid-19 pandemic.
The ESA’s newly launched Sponsorship Sentiment Tracker, found that 72% of brands are looking to extend their sponsorship rights while 48% are looking to add new assets to fulfil their contracts.
However, the impact of Covid-19 has been immediate and significant with the Sentiment Tracker finding that 43% of surveyed companies have furloughed employees, including two thirds of rights holders. Of those who have temporarily laid off staff, the average headcount reduction was around 40%-50% per business.
Just under a third of companies surveyed have applied for government help, with a further 33% saying they plan to or may do. 67% say they are working on several different business strategies depending on the length of the lockdown.
The good news for football is that 50% believed there would be a greater appetite for live sporting events and 70% expecting an even greater consumption of digital content – the two areas where football scores highly, and where clubs and leagues have developed strongly.
ESA chairman, Andy Westlake, said: “While we know that the European sponsorship community has been hit hard by the Coronavirus pandemic, the results of the ESA Sponsorship Sentiment Tracker show that there is reason to be positive about the future of the industry.
“Our research shows that more than 70% of sponsors plan to extend or adapt their current deals. I have a strong belief that those brands that continue to support sports and entertainment will undoubtedly reap long-term rewards. There are certainly challenges ahead but we work in an industry that thrives on innovation and I remain positive, once live events return, that our industry will be ready to recover quickly.”
Only 30% of those surveyed agreed that Covid-19 will have a major long-term negative impact on sponsorship.
However, change can be expected with 39% of rights holders and agencies saying they were freezing budgets until events resume, while 27% saying they are considering changing communications strategies. 17% are exploring diverting spend to other channels.
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