February 25 2016

How Recent Sport Scandals will Impact Sport Sponsorship

Thought Leadership, Europe, UK

2016 is shaping up to be a big year in sport with the Rio 2016 Olympics, Euro 2016, The Ryder Cup and ICC Twenty20 World Cup alongside the regular annual events. However against the backdrop of these mega events, the shadow of corruption and doping lingers, and in some cases continues to grow as the recent allegations in tennis and cricket show.

As more details surrounding allegations in football, athletics, cycling and tennis, amongst others, emerge, questions around the impact on the sports themselves and on those connected become more prominent. These are escalated in the social media age which gives both fans and journalists a platform to voice their displeasure and pressure brands into action.

Why sponsors are demanded by the media and consumers to be the moral compasses of the commercial side of sport in these instances, rather than the broadcasters (who are far more significant and influential investors with these federations) is perhaps a discussion for another day.

The issue has come to the fore recently with the pressure on brands in response to these events. Arguably, the most prominent case in point is the ongoing FIFA corruption scandal which resulted in Emirates not renewing their sponsorship deal and a number of others voicing their displeasure and calling on Sepp Blatter to resign last year.

The subsequent IAAF doping scandal – with revelations in late 2015 of wide-scale state-sponsored doping – has taken this to another level. These allegations are heavily damaging to athletics and the integrity of the on-the-field product, something sponsors are directly paying to associate with. This, it can be argued, is even more concerning than the behaviour of some corrupt individuals at FIFA, who although may have been caught with their proverbial hands in the till, have not impacted the purity of the on field performance.

It is, nevertheless, therefore unsurprising that brands are more likely to be vocal and take action against these revelations (as seen by the rumours surrounding adidas this week).

One of the core principles of sponsorship is the benefit received from a positive brand association and IP, therefore when the integrity of the sport comes into question, the impact is felt by all those connected, resulting in sponsors increasingly playing a more active role in the politics of sport in order to protect their own brand image and value of their associations.

For brands connected to sport, it is likely that going forward clauses in contracts regarding corruption and scandal will become much tighter, thus offering brands better protection against it. Additionally brand consumer communications in the aftermath of these events will have to take public opinion of the incident into much more careful consideration, or potentially face a very public backlash across social media in particular.

However we should remember that it is not all doom and gloom. They are many many fantastic administrators in sport, who do a wonderful job without seeking public attention, and the bad eggs must not be allowed to tarnish the huge range of positives that sport can deliver, both for society and its commercial partners. Figures recently released in December 2015 showed that the 2014 FIFA World Cup reached 3.2 billion viewers and London 2012 reached a total of 3.6 billion viewers, something which is likely to be mirrored by Rio 2016.[1] So whilst the politics rage on, the sustained faith of fans continues to provide brands with an unrivalled combination of reach, passion and engagement which still makes sport and incredible platform for marketers.

[1] Source: FIFA & IOC