Global sports sponsorship rights fees will fall from $46.1bn (R806bn) in 2019 to $28.9bn (a 37% year-on-year decrease) in 2020 as the result of the COVID-19 pandemic, according to projections by international sports marketing agency Two Circles.
Gareth Balch, Chief Executive of Two Circles, said: “With live sport halted globally since March, the value that sports properties have been able to deliver brand partners has been limited, with cost-cutting in sectors that invest heavily in sponsorship also presenting a significant challenge in signing new deals.”
With the financial services sector being one of those likely to feel the impact of the pandemic most acutely, its contribution to sports sponsorship expenditure is expected to fall by 45% to $6.9bn (R120bn). In 2019, its spend of $12.6bn (R220bn) represented the highest of any individual sector.
Automotive, energy and airlines also ranked in the top 10 in sports sponsorship spend in 2019. Automotive, the second-biggest spender in 2019, will contribute $2.7bn (R47bn) in 2020 according to the projections, down from $5.9bn (R103bn) the previous year (a 55% decrease).
The Two Circles figures do not include spend on the activation of sponsorship agreements.
Balch did offer a more positive view in terms of the long-term outlook. He said: “Though every corner of sport is hurting, we remain certain that sport’s economy will thrive in the long-term, and when the impending recession bottoms-out, all sectors will rely on the best marketing platforms available to grow their businesses. The sports properties that use this period to invest in their sponsorship propositions, moving away in particular from analogue-led logo exposure to digitally-driven, tangible audience engagement, will be those that thrive most post-COVID-19.”