Global Sports Sponsorship Market Expected To Fall By $26 Billion

Global sports sponsorship rights fees are expected to fall by more than $26 billion (37 percent year-on-year) due to the COVID-19 (Coronavirus) pandemic.

The projections are from the latest Two Circles research, which indicates the biggest investor in sports sponsorships, financial services companies, will decrease sponsorship spend by 45 percent, from $19.2 billion in 2019, down to $10.5 billion this year.

Meanwhile, Two Circles predicts the industry’s second biggest spender in 2019, the automotive industry, will also reduce sponsorship spending by 55 percent, from $9 billion in 2019, down to $4.1 billion over 2020.

In the report, Two Circles chief executive, Gareth Balch, said the findings are worrying for the future of global sport, as COVID-19 continues to change the shape of the entire world.

“The COVID-19 pandemic has seen most new sponsorship agreements put on hold, and many existing agreements will be ended as a result of companies implementing major cost-cutting measures or going out of business,” Balch said.

“Sponsors will also be given ‘makegood’ sponsorship collateral and cash rebates due to the postponement and cancellation of live sport, significantly reducing their financial outlay in 2020.

“Live sport halted globally since March, the value that sports properties have been able to deliver brand partners has been limited, with cost-cutting in sectors that invest heavily in sponsorship also presenting a significant challenge in signing new deals.

“Though every corner of sport is hurting, we remain certain that sport’s 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,” he said.

With sport around the world slowing making a comeback with the world starting to ease Coronavirus restrictions, the sponsorship spending will still likely have to wait as the world’s industries focus on their own recovery on the other side of the pandemic.