27 Feb 2011 - Product Sponsorship - Why bother and what to expect
There are many types of sponsorship agreements that can be put into to play. At Silver Hatch Sports we have experienced them all. From high value, high profile commitments through to promoting brands in schools and shops. The cost of each type of sponsorship is negotiated based on cost, value and return.
But what of product based sponsorships?
As an agent attempting to manage an athlete's sponsorship portfolio, many people looking from the outside in might believe that we are only interested in the big money deal that rewards us and our athlete with a good pay day. That observation is inaccurate. Yes, we are here to maximise the commercial value of the athletes but we are also here to manage the athlete's best interests and if that means negotiating a sponsorship or partnership deal that provides product only without monetary incentives then so be it. We add value by networking. We add value by building relationships and we add value by keeping our clients happy.
Let us be honest about the facts here. Agents (and athletes) do prefer deals where they can take their cut and we would be lying if we said anything different. The famous line of Jerry Maguire comes to mind here: 'show me the money!' That quote refers to money for the athlete and money for the agent. The difficulty with any product based sponsorship is for the sponsor to manage their own expectations. Expecting an athlete to make appearances in your shop/local school/at photo shoots all for only product in return is unrealistic.
As agents we are experienced to know what our athlete's value is. That is based on their rate of return and in many cases where product is the only offer on the table, contracts will be very limited. Very often, this is just a logo on their website but can also include some social media networking depending on the value of the product. Pictures from a database can be supplied for you to use but without monetary compensation there is nearly always no personal appearance commitments from the athletes. Contracts based on product only are also short term.
I have been privy in previous sponsorship dealings to the attitude that some agents take in terms of demands. A closed door policy on product only sponsorships. It is in my humble opinion that to service the athlete in their best interests then all offers should be listened too and then negotiated depending on commitments. Contracts should not be broken because a better offer comes along midterm as integrity is so important. It is also my opinion, that contracts can be such, that in the scenario where money is offered to an athlete from a competing brand, then the company supplying the product based sponsorship can have the first right of refusal in terms of matching that offer.
So why bother with product sponsorship?
The real business question for you is 'what returns do I get'? It is the same argument that is presented with any sponsorship.
- • The value of brand association?
- • The potential of any athlete winning gold?
- • Tapping into the audience that follows that sport and that individual
- • The quality of the sport
- • The quality of their name
- • The quality of their image
- • Simply to be involved for the love of the sport
Do your research. Do your due-diligence. Know who you are getting into bed with. Understand the expectations. Manage your own expectations. At the end, calculate or judge whether the investment will be a good and positive one. If it is, then the question is why not?