Sometimes it pays to be the little guy, particularly if your athletic team is looking for corporate dollars.
In the competition for lucrative sponsorships, some Connecticut sports teams are performing better than national, professional teams, which are taking a beating from the fallout of the financial crisis.
The recession has forced many corporations to pull back on their expensive sponsorship support of major league teams, while more affordable local and minor league organizations are reporting that their corporate support is the same or slightly higher than last year.
Bill Dowling, president and CEO of the New Britain Rock Cats, said his team is on pace to meet its annual corporate sponsorship goal in the “seven figure” range and is cautiously optimistic the team will bring in more revenue than last year.
Not only is the team performing adequately in corporate sponsorships, but group sales for the upcoming season at the ballpark are up 12 percent from this time last year, Dowling said.
“We haven’t really seen the effects of the downturn yet,” Dowling said. “We are cautiously optimistic that we will do slightly better than last year. In some ways, I think we are recession proof.”
Dowling said big name contributors like Stanley Works and Comcast remain committed to the team.
Sales from corporate sponsorships at the XL Center, which are used to support the Hartford Wolf Pack, typically run in the multimillion dollar range and are running the same or slightly ahead of last year’s pace.
“We’ve been very aggressive with renewing sponsors, getting new ones and reworking contracts for companies who are facing financial hardships,” said Michael Kassa, vice president of sales for Northland/AEG.
Meanwhile, the athletic department at the University of Connecticut inked a 10-year agreement in September with a national marketing firm that will bring the school more than $80 million in guaranteed money from corporate sponsorships and stadium signage.
The partnership with Kentucky-based IMG College, represents an insurance policy for the school during challenging economic times, guaranteeing a steady flow of corporate dollars.
Hard Hit
Corporate sponsorships are the lifeblood of professional and college sports, providing a large source of revenue that pay for day-to-day operations.
And the importance of a local connection between the corporation and the team it supports is becoming increasingly significant.
Mel Poole, president of SponsorLogic, a sponsorship consulting firm in North Carolina, said that companies that sponsor minor league teams usually do business in that region so they can interact with fans on a personal level and make direct sales contacts.
“Minor league fans are more dedicated to the city, so the corporate base can feed off of that association and create more of an emotional connection with the market place,” Poole said.
In contrast, national sponsorships are mostly about improving brand awareness, something many corporations are finding that they can’t afford during the current economic downturn, Poole said.
Too Expensive
Kassa of the XL Center said that it takes a “significant investment for companies to get recognized in major league sports,” which many companies can’t afford right now.
Take General Motors, which recently announced it will not be renewing its sponsorship with the Pittsburgh Pirates, while long-time NASCAR sponsors Home Depot and Kodak have departed the sport.
The PGA Tour is also taking a hit. Ginn Development, a struggling luxury real estate giant in Florida, recently dropped its sponsorship of the Champions Tour’s Ginn Championship.
No sponsors have emerged to save an Atlanta tournament, which has been on the schedule since 1967.
And Houston-based Stanford Financial, a sponsor of major tournaments on the PGA and LPGA tours, was recently placed in receivership and is being investigated by the SEC for an alleged $8 billion fraud scheme.
Despite their success in retaining corporate dollars, however, Connecticut teams have noticed some shifts in the market place.
Kassa said there have been several businesses who stopped advertising with the XL Center and that some companies have asked to restructure their contracts to make them more affordable.
Kassa said they have been willing to restructure deals, which helps them maintain relationships and also attract new sponsors.
They also have multiyear commitments which positions them well for the future.
Dowling said his team has also seen a shift in lower level sponsors, but big name contributors remain committed to the team.
“Most clients don’t really want to walk away from their deals, but they do want to make some changes to reflect the economy,” Kassa said.
