The Business of Sports Sponsorships

Sports teams and athletes attract sponsors to finance certain aspects of their business, such as the cost of managing major stadiums through naming rights. How does that benefit brands? Well, the digital age allows companies to engage with a ready-made global audience of sports fans meaningfully, raising awareness and marketing an image that suits their objectives. Group CEO of Unorthodox Group, Sibabalwe Sesmani, gives us more insight into the business of sports sponsorships.

GQ: What does managing an athlete involve?

We manage them holistically by working on a brand strategy that helps us govern their messaging and decide which brand collaborations align with their core values. We don’t just look after them as athletes but also hone in on their interests to help us understand their passions. And their affairs, for instance, helping them with their retirement plan.

GQ: Talk us through the basics of a sports sponsorship contract.

After a brand approaches us, we thoroughly research them and decide whether they’re relevant to the athlete. Then we look at expected deliverables and if the brand’s value is equal to that of the athlete. Usually, considerable negotiation takes place before signing a contract, including consulting with the athlete.

GQ: What are the different types of sponsorships for athletes?

Financial sponsorships require more negotiation as the brand decides the budget and deliverables, and the athlete’s manager ascertains if their budget matches their required deliverables. Whereas, a value-inkind sponsorship contract is more like a barter contract involving exchanging goods or services or possible opportunities and/or partnerships both entities benefit from.

GQ: What makes a sponsorship deal good or bad?

As much as a manager protects an athlete’s interests first, the negotiation process must be fair for both parties. A bad deal is where one side’s exploited and doesn’t get any value out of it.

“Essentials pull quote is the G-spot of the week, right up there in the middle. The worst is over, but you’re not out of the woods”

GQ: How do you secure a sports sponsorship?

The easiest way for a brand is to approach an athlete. Through our PR wing, Unorthodox PR, we’re intentional about effective PR for our clients, such as using social media appropriately and attracting the right sort of engagement. We only approach brands that are a good fit. Then, we draft a proposal outlining the benefit of a relationship between an athlete and a brand and the problems we can help solve.

GQ: How can an athlete build a successful relationship with their sponsor?

Make sure you resonate with the brand.

Meet all deliverables timeously.

3. We like providing add ons for our sponsors by involving them in other projects outside the contract – after we’ve all signed it, of course.

4. Think about the long-term benefits you can provide a sponsor. 5. Evolve with the brand as you would as an athlete. Be proactive.

GQ: What do brands expect ambassadors to do?

Mostly, social media posts, usage and appearances.

GQ: What are sponsorship dealbreakers?

If a brand doesn’t align with the athlete, sponsoring them won’t make sense to consumers. We’ll decline an offer immediately if it’s one-sided and doesn’t benefit an athlete or if the brand has been involved in immoral, unethical or illegal activity.

GQ: What should an athlete consider before signing a sponsorship agreement?

Find out if competitor brands are aligned with that agreement and ensure the brand is in good standing. You need to be fully satisfied with the value vs. deliverables and ensure the usages are crystal clear. You also need to be happy with the termination procedure, should that occur.

GQ: How long does a sponsorship negotiation agreement usually take to finalise?

This is a tough one to answer, as the bigger the brand and the more flexible a contract is, the longer it takes, anything from one week to three months.

GQ: How long do sports sponsorships for individuals or teams usually last, and what would end a sponsorship deal prematurely?

We prefer initial sponsorships of one year to see how well an athlete and brand work together, then upon renewal, should all parties be satisfied, we’re happy to extend the contract to up to five years.

The most probable causes of a sponsorship prematurely ending are consistent non-delivery from an athlete or brand, an athlete embroiled in scandal or a brand acting outside the agreed terms.

Never before has more money been thrown into marketing with athletes, sports teams or sporting events – and this billion-dollar industry continues to grow