Academic journal article International Journal of Sports Marketing & Sponsorship

The Dynamics of Sport Sponsorship: The Case of English Professional Football

Academic journal article International Journal of Sports Marketing & Sponsorship

The Dynamics of Sport Sponsorship: The Case of English Professional Football

Article excerpt

* Keywords: English Football Team Sponsorship, Mimetic Isomorphism, Entry-Exit Cycles

Executive Summary

Sponsorship is an important source of revenue for many sports. So far most of the research on sport sponsorship has concentrated on corporate attitudes: empirical evidence has mainly taken the form of cross-sectional studies of corporate sponsors at a specific point in time, and there has been little research on the changing patterns of sport sponsorship over time.

This paper attempts to develop a general theory of the dynamics of sport sponsorship. Such a theory has the potential to have considerable practical relevance by providing a framework for assessing why sponsors enter and exit a sport. This should help develop an understanding of what constitutes an attractive sponsorship opportunity, and how such opportunities work to retain existing, and attract new, sponsors.

The starting point is the suggestion of Slack and Thwaites (1997) that sport sponsorship is often a process of mimetic isomorphism in which corporate sponsors enter individual sports in a "follow-the-leader" manner.

Following Haveman (1993), Slack and Thwaites suggest that the rate of entry of new sponsors can be modelled as density-dependent with an inverted-U-shaped relationship between the rate of entry of new sponsors into a sport and the number of existing sponsors already established in the sport.

This paper moves beyond mimetic isomorphism and the density-dependence model. It is argued that mimetic isomorphism provides a sponsor-based theory of sport sponsorship that neglects the role of non-density factors in determining the attractiveness of sport as a sponsorship medium. A formal model is developed in which the rate of entry and exit of sponsors into any individual sport depends on its attractiveness as a sponsorship medium.

A sponsor's willingness to undertake a specific sponsorship project is

determined by the degree of exposure, the quality of the sponsorship message, the costs of the sponsorship, and the degree of uncertainty of the sponsorship outcome.

This more general theory of the dynamics of sport sponsorship can explain the rate of exit of sponsors as well as the rate of entry. It also allows for exogenous changes in the attractiveness of a sport such as increased popularity reflected in higher gate attendances and greater media coverage.

It follows that if non-density factors are significant, then the entry-density relationship may not necessarily have an inverted-U-shaped pattern. Rather entry-exit cycles may occur punctuated by growth or decline phases.

This more general theory of the dynamics of sport sponsorship is applied to the empirical evidence of Scannell (1997) on team sponsorship in English professional football.

Scannell concluded that there is little or no evidence of density-dependence in the changing sectoral pattern of team sponsorships. However, it is shown that Scannell's failure to detect an inverted-U-shaped entry-density relationship is not surprising given the change in the attractiveness of English professional football as a sponsorship medium during the period under investigation.

A re-examination of the evidence suggests that the two main sectors involved in this form of sponsorship - brewing and electronics have exhibited growth phases and entry-exit cycles but with very different patterns, possibly due to differences in corporate objectives between the two sectors.

Section 1: Introduction

Sport sponsorship is big business. Recent estimates suggest that the sponsorship market worldwide was worth $18 billion in 1997 (SRi, 1998).

Sport is the dominant sponsorship medium accounting for an estimated 60% to 70% of all sponsorship spend. Within total advertising expenditure, sport sponsorship is a small but not insignificant component that continues to grow quickly, currently representing around 4% of the total advertising budget. …

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