A Simple Explanation of a Sponsorship

Have you ever wondered why sporting jerseys have brand logos plastered on the back of them? When a brand’s logo is featured, this is indicative of a sponsorship relationship between the team and the brand. Sponsorships are a great way for clubs or associations to source extra funds, whilst giving brands and companies the opportunity to increase brand visibility. This Business Kitz blog will take you through the basics of sponsorships and how to source one.

What is a sponsorship?

For many clubs, associations and leagues, sponsorships are crucial to the survival and success of a business. But what exactly is a sponsorship? A sponsorship is a business arrangement that benefits both the business (sponsor) and the club (sponsored). The transactional relationship usually involves a brand giving a club a sum of money to assist in the purchasing of uniforms and resources, in exchange for advertising arrangements.

From the perspective of a sporting club, having sponsors may greatly assist clubs in meeting their aims and objectives. Sponsors’ financial support is frequently used to reduce costs at the club. This might include equiptment, uniforms, and tournaments, as well as general club administration. 

Sponsorships are not strictly financial contributions. Sometimes sponsorships might take the form of donations of goods, products and services, or access.

How are sponsorships organised?

Club members and coordinators may reach out to local businesses or services to organise a sponsorship relationship. This is often businesses that members have a pre-existing relationship with or there is a community connection already established. More professional clubs may choose to have a sponsorship coordinator to organise these relationships. This allows high-level sponsorship relationships to be formed, gaining greater visibility for brands and greater funding for clubs.

For professional clubs, the more sponsorship income they generate, the more players of (considered) higher quality they can bring in, and the more likely they are to succeed. As a result, sponsorship co-ordinators play a major role in determining the funds that the club has access to, thus determining the club’s success.

How does it work?

Sponsorships assist in increasing brand awareness for the sponsor, whilst aligning itself with the community. This relationship generates a ‘halo effect’ of goodwill for the sponsor. Further, sponsorships can be a more subtle way of advertising a brand.

How can I leverage my partnership?

Sponsors should focus their branding and marketing communications efforts on leveraging the association to maximise the commercial outcome of their sponsorship. For example, in addition to exhibiting their logo on flags or banners at a sponsored event, firms may promote the event and their role as a sponsor through social media posts.

Customers can have a good relationship with a certain brand as a result of them sponsoring sports, events, causes, or other entities that they care greatly about. Sponsors marketing their partnership allows these businesses to capitalise on the emotional connection that these customers have with the team or club. The values of the sponsored activity or business are then linked to the brand of the sponsor.

Can sponsorships enhance the public relations of a business?

Fostering a socially responsible reputation through funding institutions such as sports clubs that customers care about is a great way of creating brand trust and personality. Improving community relations is a typical goal for organisations and brands in order to bolster local business and customer bases.

Apart from well-known sporting clubs, organisations also sponsors local events or non-profit organisations that assist the community.

Sponsorship may be used to build ties with the target market by indicating that a company has similar interests as their community. This can also assists in the formation of links between business partners who share a shared sponsorship or in the strengthening of relationships with existing and future clients via the use of sponsorship benefits such as a corporate box at events.

Legal Advice

If you require assistance regarding sponsorships, you should seek legal advice. Our sister company, Legal Kitz‘ business specialists can assist with ensuring that your matter is as time and cost efficient as possible. We provide a FREE 30-minute consultation to set you in the right legal direction. Click here to book a FREE consultation with one of our highly experienced solicitors today or contact us at info@legalkitz.com.au or by calling 1300 988 954.

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