Business spending on sports sponsorship is set to grow by 4% to £35bn globally in 2019, according to a new report. But rights-holders, such as leagues, teams or tournaments, are under-exploiting sponsorship deals, according to research from agency Two Circles. It says that there could be an extra £14bn in revenues being unrealised because of outdated rights packaging. It also says sport has to move beyond backers such as carmakers, financial services, airlines and gambling. "Most rights-holders continue to package and sell sponsorship just as they did 20 years ago - offering brand exposure through linear (TV) broadcast coverage as the main benefit for brands," says Two Circles boss Gareth Balch. He said the power of digital marketing was still not being fully utilised by sporting bodies. Source: Two Circles "Rights-holders are adapting," Mr Balch added, "and we predict a sports sponsorship correction". "By embracing the power of digital and data to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses." Two Circles predicts spend on sponsorship will increase by 6% on average year-on-year between 2020 and 2024 to hit £48bn overall by the end of the period. The report comes amid concerns in Europe that marketing restrictions on gambling firms, which currently account for 12% of sports sponsorship spend in the UK alone, could have a considerable negative impact on the sports sponsorship market. In the UK, health bodies, charities, regulators and businesses are being brought together to tackle problem gambling. The Gambling Commission has drawn up a three-year strategy that focuses on prevention, education and treatment and support for problem gamblers. GVC Holdings, which owns Gala, Ladbrokes and Coral, has said it is stopping all football shirt sponsorship, as well as stopping perimeter advertising at matches.
Companies are expected to spend £35bn ($46bn) on global sports sponsorship during 2019, a as much as £14bn increase, but agency Two Circles said leagues, teams and tournaments are under-exploiting the deals by 4%. It said rights-holders were selling sponsorships the same way they did 20 years ago and were not fully using the power of digital marketing. Two Circles also said deals should not just rely on the usual backers such as carmakers, financial services companies, gambling firms and airlines. It forecast sponsorship spending would rise by 6% YoY between now and 2024, reaching £48bn.