Sports rights industry worldwide is feared to suffer a year on year revenue loss of up to 37% in sponsorship sales alone, which are projected to fall from $46.1 bn last year to $ 28.9 bn in 2020 as Covid-19 pandemic has halted the live sports action across the globe.
According to a report by Two Circles, global sports sponsorship spend, which has grown from $ 44.3 bn in 2018 to $ 46.1 bn last year, is feared to be restricted to $28.9 bn in the 2020 fiscal year.
“As a marketing platform to reach passionate and emotionally-engaged audiences at-scale in brand-safe environments, sports sponsorship is unrivalled. However, with live sports halted globally since March, the value that sports properties have been able to deliver to brand partners has been limited, with cost-cutting in sectors that invest heavily in sponsorship also presenting a significant challenge in signing new deals,” Two Circles has quoted CEO Gareth Balch as saying.
Financial Service Sector, among the sports’ biggest sponsors worldwide, is projected to account for a 45% decrease in sports sponsorship spending with the values feared to come down to $ 6.9 bn by the year end from $12.6 bn for the corresponding period a year ago. The sector has been one of the worst affected by the Covid-19 pandemic.
Among other major sponsors of sports events, automobile industry to has been hit hard. This is projected to have a major negative influence of the sector’s investment on sports sponsorship, which last year stood at $ 2.7 bn. A 55% decline is feared as the report projects a total contribution to be up to $ 2.7 bn by the year end.
Energy and aviation sectors, among the other top ten contributors to sports sponsorships too have seen an unprecedented fall in business. Balch, however, foresees some hope for sports business on account of innovations expected to take place to deliver value for brands during the Covid-19 lockdown period and a sustained period of spectator-less sport.
“Though every corner of sports is hurting, we remain certain that sports’ 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,” says Bach.