Why it matters
The attention paid to sport and entertainment crosses income, ideological and geographic boundaries. For brands leaning into environmental and social issues, sponsorship presents a highly visible, multi-touchpoint and extended storytelling platform that transcends sociocultural divides. Values-based partnerships centered on social impact are on the rise.
Takeaways
- Sport rightsholders are increasingly adopting sustainability strategies and reporting their progress, providing credible platforms for brands to communicate ESG goals and progress.
- Sponsorship offers rich inventory and consumer interaction on an ongoing basis (vis-à-vis owned/paid media) that lends itself well to long-form storytelling and ‘living lab’ demonstration sites for delivering on and engaging fans on climate and social impact.
- Values-based sponsorships are outperforming traditional partnerships in delivering on fan engagement, earned media and can contribute quantitatively to partners’ ESG reporting targets.
- Sport commands outsized attention – which invites added scrutiny. Choosing a values-aligned property, selecting a credible campaign focus and getting the messaging right is critical.
Five key forces in play
There has been a seismic shift in brand strategy, marketing and messaging. This was signaled clearly in 2020, when 63% of brands shifted their primary messaging to focus on social equity and climate themes.1
While it’s natural for advertisers to adapt to cultural signals, this is no momentary response. This approach to deeper stance-based marketing is here to stay, with five key forces driving evolved business models, and in evidence across all industry sectors and most geographies.
- Regulation and reporting demands. Every major global corporation faces increased reporting requirements on environmental, social and governance (ESG) issues. False reporting carries heavy sanctions and fines, accompanied by brand damage.2
- Corporate citizenship commitments across ESG seem have become critical to employee recruitment and retention,3 and also to investors.4
- Consumer expectations. 86% of consumers expect companies to stand for more than profit, 81% expect public declarations from brands on issues, and 33% have punished a brand for bad behavior.5
- Greater sensitization. Sports fans index somewhat higher than the general public in their concerns around climate and social issues, attributing personal experience with the impacts of extreme weather events, and direct and indirect experience with health and income insecurity.
- Systemic tensions that have driven all of the above are not going away anytime soon. Pressure and urgency from the forces above will only increase as we approach climate constraints that strain society’s balance and function.
Sports and entertainment partnership trends
a) Every conversation includes impact issues
Mid-2020 saw teams, leagues and circuit-based sports tours go on an all-out sprint to offer “make good” sponsorship assets, largely consisting of additional logo placement in empty or reduced capacity stadia. Brand partners declined, advising properties that they were taking time to strategically rethink both messaging and media that would meet evolving expectations of their role and actions in society.
For rights holders, this manifested in every partner raising community health, diversity and environmental action in partner dialogues. Community relations and foundation personnel once held at arm’s length are now central to every partner negotiation.
The most progressive rightsholders have shifted from a transactional, asset menu-based and category-defined approach to their sponsorship offering to an ESG-grounded, values-based platform model. Partnership conversations start from shared goals and work together to develop both unique and multi-sponsor programs to achieve them. The WNBA Gamechangers6 initiative and the NFL’s New York Jets were early proponents of this model.
b) Valuations rising
Rightsholders with well-articulated principles are booking significantly higher value deals. Angel City (NWSL) currently posts a partner portfolio value of $90m, nearly 2x more than the most recent NWSL total franchise valuation of $53m. The Seattle Kraken hold one of the highest naming rights deals in North America with an estimated $800m, 20-year deal with The Climate Pledge, an initiative of Amazon. This is roughly double the league average.
c) Engagement rising
Analysis conducted by Tradable Bits7 and Zoomph8 has revealed that fan engagement on social and environmental-themed posts outperforms typical contest, or promotional posts by 4X. In some instances, this number has been up to 10x. This is further substantiated by insights from Sponsor United, tallying 480 brands and 330 properties leveraging an ‘Environmental Cause asset’.9
d) Evolving sponsorship marketplace
67% of brand marketing professionals believe sponsorship offers a better platform for values-based marketing than advertising (MKTG Frontier Study, 2022)10 and Nielsen has estimated that rightsholders with a sustainability agenda will earn on average 11% more than those without.11
Who’s getting it right?
So, what does a successful values-based partnership look like?
- The campaign theme, messaging and activation are firmly established with shared ESG priorities.
- ‘Impact metrics’ arise from clearly stated business and ESG goals, defined actions are aligned to global targets, and progress is publicly reported verified by third parties.
- The full stakeholder audience is addressed through effective, relatable storytelling, underpinned by reporting transparency. The addressable market includes fans, consumers, employees, retail and institutional investors, suppliers, distributors, government, NGOs and media.
This approach opens a door to ROI across nearly all functions of a corporation – well beyond the traditional sales and marketing goals focused on B2B and B2C customers of a last-century approach to sponsorship.
Sophisticated sports rightsholders know their values and their value
The most progressive properties took the memo in 2020 and have been transforming their sponsorship platform accordingly.
Liverpool FC has now aligned all partners to ‘The Red Way’, its sustainability strategy across the pillars of ‘People, Planet and Community’.12
In April 2023, the NHL’s Pittsburgh Penguins announced ‘The Penguins Pledge’, a consortium of six large partners, grounded in the vision for the region’s sustainable future, working not along official partner/supplier categories of sponsorship, but in this new collective action.13
One NBA team has worked through the valuation of its sustainability assets and currently estimates this at $10-16m per year. The SponsorUnited numbers cited above bear this out.
The Bundesliga’s TSG Hoffenheim attribute €1bn in revenue and impact directly related to its “common value” partnership model.14 A University of Mannheim study shows fans’ awareness of sponsors’ sustainability efforts has increased up to 25%, and positive brand perceptions are up as well – in a market known for its healthy skepticism of brand claims.15
Values-aligned partnerships spotlights
DHL is able to showcase its capabilities in a demanding environment16 with partner F1 contributing audited metrics through standardized global reporting frameworks.17
Xylem’s bet18 on addressing a universal issue through a high-visibility global platform has paid off, largely due to high-production value commitment in getting the message right19 and in selecting a partner with strongly aligned values and a proven track record in environmental performance.
Diageo’s well-intentioned efforts to reach women consumers stuttered20 until it found solid footing and a robust long-form storytelling platform in AngelCity FC.21
Methods and tools to support values-based sponsorship success
Choosing an activation topic based on what consumers “care about” right now is deeply flawed. This method has spawned categorical backlash, in the form of green-, pink- and rainbow-washing and resulted in multi-million-dollar deal collapses.
One key step is to break down internal silos and for brand marketers to consult their Chief Sustainability, Chief Diversity or People Officer and other in-house ESG experts. There may still be an understanding gap to bridge between them, as noted in the WFA report ‘Minding the Gap’.22We are also at the early stages of sports properties public ‘standardized’ reporting, making it difficult for corporate ESG professionals to assess alignment.
Similarly, on the rightsholder side, the dizzying array of global reporting standards are beyond the paygrade of most sponsorship sales professionals, and rightly so. This is not their primary function.
Another is to seek out their own company’s ‘Citizenship’ standing via third-party rating services, such as EcoVadis, CDP or financial markets’ ratings. However, these are typically assessments of what has been versus what is, and can be confusing to interpret for those not versed in both the scope and limitations of such ratings and reporting methodologies.
The recently-introduced ‘Sports Partner Score Card™’ is a purpose-built framework, specifically designed to provide a plain-language due diligence tool to discover and assess values alignment between brands and sports and entertainment properties. This agile analysis method was developed by 5T Sports Group, a sustainable sport consultancy and B Corp.
The intent is to both match like-minded properties and to guide sports partnerships to credible, measurable campaign themes based on a quantitative and qualitative assessment of each parties’ standing. The intent is to enable partners to confidently embrace causes and issues in the face of rampant green- or sport-washing accusations.
The score disparity between the two partners on several key people issues action directs them away from designing a campaign that could backfire in fans’ and consumers’ eyes.
A 60-point assessment scores ESG-performance across four ‘lenses’ and 20 ‘impact levers’, providing both quantitative and qualitative insight, and enables apples-to-apples comparison of sponsor to property, the performance of various sports investments to one another to inform a brand’s investment/retention decisions and relative performance of competitor brands within a category, which can highlight key differentiators even when aggregate scores are similar.23
The underlying dataset currently includes 70-plus global sports partners and rightsholders, enabling the speedy generation of insights to guide:
- Sponsorship investment decisions (scouting, vetting, valuation)
- Partnership activation (campaign theme development, storytelling support)
- Performance measurement and renewal (impact metrics definition, ROI measurement, roll-up reporting)
The Sports Partner Score Card was designed to support the growing movement toward values-based partnerships, which early research has shown to be higher performing on both marketing and brand image KPIs and likelier to renew, meaning less churn and more value creation for both parties.
What can brands / agencies do?
First steps in shifting to values-based sponsorship include:
- Understand your brand/property’s relative standing as ‘Brand Citizen’ – beyond ESG scores. Leverage sustainability / ESG experts in-house
- Shift the mindset from ‘awareness and sales’ to incorporate long-term overall business and ESG goals. Consider the non-financial goals (environmental and social commitments) of your partner (hint: read their sustainability report or consult that section of their website).
- Select campaign theme based on credibility, materiality and KPIs. Stress test this against your target market research, but don’t be shy to move the conversation ahead boldly.
- At the outset make a public commitment including quantitative targets and invite fans and consumers in to contribute to the effort. Those who follow teams do so out of a sense of belonging and look to bask in the shared glory of success.
- You DO NOT need to be perfect. You do need to be honest. Leveraging the sports sponsorship realm with values-based partnerships in the right way affords brand partners to work with the narrative of sports – even when the ultimate prize eludes us, a dedicated work ethic, team effort and progress milestones are acknowledged.
Summary
Values-based sponsorships are exponentially outperforming traditional partnerships in delivering on fan engagement, earned media and can contribute quantitatively to partners’ ESG reporting targets. They can:
- Deliver dual value of marketing, sales, brand life and ESG impact metrics
- Are suited to long-term, serial storytelling (supports the journey narrative)
- Support an interactive and participative campaign
- Offer physical facilities, digital content, continuous media channels, highly interactive social content, global fanbases and big moments
- Provide deep fan affinity transference to brand (especially in women’s sports)
References
1. Gum Gum Sports / IAB Poll (citation only; original report no longer available)
2. Greenwashing Crackdown Gathers Pace, Potentially Significant Fines
3. How ESG is Becoming a Driving Force in Hiring and Retention
4. Institutional Investors Move Headlong into ESG
5. Wasserman Insights “Step Up or Sit Out”
6. WNBA Changemakers Partnership Platform
7. Tradable Bits
8. Zoomph
9. SponsorUnited April 19, 2023
10. MKTG Frontier Study
11. Nielsen Changing Value of Sponsorship March 2021
12. Liverpool FC – The Red Way
13. The (NHL) Penguins Pledge
14. TSG Hoffenheim – Common Value Approach
15. University of Mannheim Study “Sustainability in Professional Football: More Value in Sponsorships?” (German Language presentation)
16. DHL — F1 Partnership perspective
17. F1 –ESG Briefing Note (Sustainability Progress Report)
18. Xylem – ManCity Partnership perspective
19. The End of Football
20. Diageo/Jane Walker perspective
21. Angel City Impact Report
22. World Federation of Advertisers – Mind the Gap
23. SportsPro Case Study: Sports Partner Score Card Heineken-UEFA-F1-Formula e
Resources
WARC Sponsorship Series
WARC 50 Shades of Greenwashing
Futureproofing Sports Partnerships, 5T Sports Group,
Activating Sports Partnerships for Environmental Goals: How Does It Pay for Sports Fans to Take Action?, Climate KIC, McManamon, McCullough, Kellison, Atkins
Read more in this Spotlight series