Opportunities with emerging and second-tier Sports.

It’s a strange era for sports marketing — one where, for the time being at least, many major sports sponsorships are losing their appeal. Empty corporate seats at the new Yankee Stadium and Wachovia/Wells Fargo paying over $6 million to sponsor a PGA Tour tournament and then removing its name from it entirely are just two notable examples.

In other cases it’s simply too expensive, especially with the “major” leagues — NBA, MLB, PGA Tour, NASCAR, and the NFL. For those properties, sponsorship and related activation can easily cost several million per year, with mandatory multiple-year commitments.

However, the proven, fundamental benefits of sports sponsorship remain. It’s a compelling way to associate a brand with an affinity or lifestyle and leverage that relationship to connect with fans — an opportunity to make connections through existing interests and affinities where they invest time, money, and passion.

Bank of America recently told Sports Business Journal that for every dollar it spends on sponsorships, $10 in revenue and $3 in net earnings are generated. FedEx spends over $25 million annually on the PGA Tour, NFL and auto racing, and sees multiple returns on its brand awareness, favorability, and overall investment. But, recently, fewer companies are willing, or able, to make the investment necessary for major sports properties.

Yet, there still are excellent opportunities and surprising value available to marketers. The time is right to take a closer look at emerging and traditionally second-tier sports. What constitutes an emerging or second-tier sport varies depending on who’s selling, and who’s buying. But for the sake of discussion, assume it includes such diverse properties such as Women’s Professional Soccer, Mavericks Surf, Major League Lacrosse, the LPGA, and Minor League Baseball, among dozens of similar opportunities.

These properties have a compelling list of benefits, which are especially relevant and opportunistic in the current economic environment:

Far lower cost of entry. Sponsorship investment can typically be anywhere from 50% – 90% lower than the big six (NFL, MLB, NHL, NBA, NASCAR, PGA Tour), reason alone to consider new properties.

Greater contractual flexibility. Emerging and smaller properties tend to be much more flexible and accommodating in terms of contract duration, terms, and even barter opportunities. There are advantages to not being one of dozens of sponsors of a big league; the flexibility associated with emerging properties is certainly one of them.

Less corporate clutter. It’s far easier to have an impact and increase your brand presence among fewer sponsors and typically lower activation spending. NASCAR has over 50 corporate sponsors — good luck standing out in that crowd.

Better support. Generally, emerging sports are hungrier for corporate funding, and spend more time and effort working with partners to ensure sponsorship success, compared to many major sports. It’s a great advantage of being a bigger fish in a smaller pond.

Greatly reduced PR “risk.” The risk of concern over corporate waste or excessive spending is relatively low relative to the lower costs and visibility of emerging sports. While many major sports’ sponsorships are coming under increasing scrutiny, second-tier sports are often perceived as smart grass roots marketing, rather than flashy, lavish spending.

There are certainly tradeoffs to consider, including smaller fan bases and reduced media exposure. But we feel strongly that the benefits of emerging sports are substantial, and the potential ROI is huge. Personally, we’re paying close attention to the LPGA and AVP professional volleyball tour — both are great values with expanding media exposure.

There are literally dozens of properties that are worth a closer look, and the time is right to take advantage of these opportunities.

By Jon Hickey
Jon Hickey is SVP/Managing Director of Sports & Entertainment at Allen & Gerritsen in Watertown, Mass., where he is focused on client expansion of corporate sports and entertainment sponsorship and activation opportunities with a range of clients. He joined a&g from Mullen, where he served as SVP, Sports and Entertainment Marketing, working with GM Credit Card, LendingTree and MassMutual. Prior to Mullen, he was VP, Marketing at the Boston Celtics.
Courtesy of http://www.mediapost.com