Commercialisation and sport

SPORTS EVENTS and activities cost money to organise. One way to generate income and to meet the cost is to involve commercial interests.

The process of organising an event or performance along business lines is called commercialisation. Sponsorship, advertisement and product endorsement are major parts of the commercialisation process.

These days, sport is big business, and top sporting stars can make a lot of money if they market themselves well.

SPONSORSHIP

Sports sponsorship means that a company gives financial help in return for linking their name with an individual or team or a sport in general. When sponsorship is provided, money (or other material goods) is given to an activity, event, organisation, performance, or individual(s) by the sponsor and, in return, the receiver of the sponsorship advertises the sponsor’s product.

In recent years, changes in sport have resulted in a dramatic increase in the level and amount of sponsorship by commercial companies. The popularity of sport reaches a wide audience via TV and the printed media, and have driven many companies to invest money in it.

Companies provide large sums of money to help cover league administration costs and prize money for winners. The company benefits by being publicly associated with a successful performer or a winning team, and by being promoted to a very wide audience.

Although most companies take a strictly commercial view of sponsorship, some companies donate money to sport without asking for their name to be to be used in return. This venture allows the company tax relief on that part of their profit.

Commercial sponsorship of sport takes a variety of different forms. Sport performers in individual sports such as athletics often receive money to help with training and competition costs.

Companies tend to favour existing stars or at least performers who have the potential to be stars in the future. Companies also support local sport events and projects such as sponsoring school teams, adopting a facility, paying expenses for extra-curricular activities, sponsoring transport, sport equipment, interschool competition, sports clinics, coaches seminars/workshops, sports clubs, grass-root programmes, and sports scholarship for school pupils.

ADVANTAGES

Sport sponsorship provides another source of income for players and clubs in professional sport; helps cover cost of training and competition for amateurs; helps sport organisations fund grass-root programmes such as training and coaching courses; funds major events; gains publicity for the company, image and product of the sponsor; tax relief for the sponsor; helps the sponsor gain an opportunity to be associated with sporting success.

DISADVANTAGES

Sport sponsorship can cause the sport to rely too heavily on sponsorship money, and can face closure if this is withdrawn; sponsors can have too much influence over the sport; less popular sports attract less sponsorship, making it difficult for them to survive; sponsors lose if the team or the individual does not perform well.

ADVERTISEMENT AND ENDORSEMENT

Different companies tend to be attracted to different sports, because each sport attracts a different audience, which is a potential market for the sponsor’s product or services. These products or services may not necessarily be sport related. However, these companies and manufacturers are keen to use sports people to promote their products.

It is usually the better-known performers who are used, for example, Kaliese Spencer or Usain Bolt. Top sports star often appear on TV advertising products that can become household names.

Endorsement is where top sports stars give their names or approval to a product. The company wants the public to believe that if they use that particular product, they will be as good as the sports star.

Again, the sports star will receive large sums of money for each endorsement. Sports manufacturers were the first to spot the potential of sport sponsorship. Big companies such as Nike, adidas and Puma spend millions sponsoring stars and associating the success of the performer with their products.