The Silver Lining: Sports Marketing and Sponsorship in the Face of COVID-19

January 3, 2020 | Justin Orleans (Edited by Jennifer Orleans)

It goes without saying that the pandemic has had a material impact on all facets of life, with sports marketing and sponsorship being of no exception. Mary DePaoli, RBC Executive Vice President and Chief Marketing Officer, stated that “Globally, sports sponsorship rights fees are projected to decline about 40% [and] major North American leagues are expected to lose close to US$12B in revenue, not to mention the hundreds of thousands of jobs.”[1] With the pandemic cutting the global sports calendar in half this past year and industry revenue forecasted to be down by US$61B[2], there has been an unprecedented shock throughout the sports ecosystem.

           But after the chaotic year that was, I think we all deserve some good news.

Entering the New Year, optimistic from some holiday cheer, I wanted to highlight a couple of positive outcomes in the sports marketing world that were spurred by COVID-19, by addressing (i) the captive audience migrating to social media; (ii) the continued rise in virtual and immersive technologies; (iii) the diversification of sports-related content and channels; and (iv) new physical marketing avenues.

i) The Captive Audience Migrating to Social Media

           John Rowady, founder and CEO of integrated sports marketing agency rEvolution, claims that over the next couple of months, sports fans will be looking for somewhere to continue congregating, if only virtually, and that “These audiences now are migrating to these other areas of social media.”[3] Furthermore, with fans cutting the cord on cable, broadcasters have increasingly moved to other online environments to connect with people who consume content on channels such as Facebook and YouTube.[4] Teams, athletes, and consequently, brands, can therefore further leverage their social media presence to connect with eager fans, such as by sharing highlights and exclusive content. Athletes have even taken the opportunity to promote themselves and their brands through video game tournaments and Instagram live sessions; former NBA MVP Stephen Curry and MLB star Ryan Zimmerman made the most of their platforms by co-hosting online interviews alongside infectious-disease specialist Dr. Anthony Fauci to further educate the public with regards to COVID-19.[5] Fred Schonenberg, founder of accelerator VentureFuel, also suggests marketers consider “out-of-the-box” social media conventions, such as OpenSponsorship, a platform designed to automate the matchmaking process for athletes and influencers with brands.[6] From an organizational perspective, team content can also offer prominent ad placements for sponsors, and sponsors can even create their own content to distribute via team social media outlets, including their own.[7]

Some examples of organizations that have effectively taken heed of this digital movement include the Premier League social media engagement, which has increased by 146% despite a fewer volume of posts, the NBA having drawn 119% more engagement across 13% fewer posts, and the NFL increasing both its volume of posts for social (3%) and video (39%), attracting 37% more video views, and 41% more social media engagements overall.[8]

           Bud Light Seltzer, the official seltzer sponsor of the NFL, also innovated by creating the first ever virtual NFL After Party, coined the “DRAFTERPARTY”. It was hosted on Bud Light’s YouTube page by Rob Gronkowski, Camille Kostek, DJ Khaled and Big Cat, including performances by Lil Wayne and Kane Brown[9], following the COVID-induced virtual NFL draft – which reached a record 55M viewers over three days, shattering prior viewing records[10].

ii) The Continued Rise in Virtual and Immersive Technologies

           Properties across the sports world have undeniably lost out on sponsorship revenues due to COVID-19, but those within eSports have actually increased this past year by 53%.[11] In fact, the global eSports market size is expecting to increase from USD$711.7M to USD$1.22B over the next five years.[12] Virtual technologies and eSports also offer opportunities for leagues and media partners to reach fans in new ways, by replicating the experience of attending, or even participating in live games. For instance, NASCAR iRacing presents an interesting simulation platform, with more than 100,000 active subscribers globally. iRacing provides an immersive experience for NASCAR stars, Formula 1 drivers, and even fans that want to get in on the simulation driving action.[13] The eNASCAR Coca-Cola iRacing Series, formerly the PEAK Antifreeze iRacing Series and NASCAR iRacing World Championship, is the premiere eSports league sanctioned by NASCAR.[14] The league began in 2010 and is one of the longest standing, officially sanctioned, eSports racing series. Coca-Cola was named the entitlement sponsor for 2020 after having agreed to be a Premier Partner for NASCAR.[15] The Tour de France even hosted a virtual bike race to offset the deferred July race, whereby riders competed on an app called Zwift, using stationary bikes mimicking climbs, descents, turns, and even wind resistance.[16] Not to be outdone, the inaugural ePremier League Invitational netted 150M viewers, which saw football eStars represent their clubs virtually via FIFA. In addition to being broadcasted on Sky Sports and social platforms such as Facebook and YouTube, the tournament was live streamed on sites such as Twitch.[17] In consulting the ePremier League website, sponsors such as EA Sports, Barclays, Budweiser, Coca-Cola, Hublot, Nike, Avery Dennison, and Panini are spotted as proud league endorsements.[18] A recent report by Capitfy, the largest independent holder of search data outside of Google, also indicated that with mass live sports cancellations, consumer interest for sports games realized a 1054% search increase since January 1st, 2020, with the top indexing audience being sports fans.[19]

           A staple in the work-from-home environment, online videoconference platform Zoom also provided teams the opportunity to connect fans with one another during matches. At the beginning of Europe’s sports restart, Danish football club AGF Aarhus also engaged with their fans by displaying them on videoboards throughout the stadium to further foster a collective experience. This engagement effort has also been utilized by leagues such as the NBA.[20] In the MLB, season ticket holders were also able to have their likeness displayed in the form of a weatherproof cut-out in their seat for home games[21], and non-season ticket holders were also privy to the same opportunity for a fee.[22] Video conference platforms have also been used to host virtual tailgates and panel discussions, which could further branding opportunities.[23] For instance, the Los Angeles Dodgers recently drew 11,000 fans for a Zoom party[24], which was presented by gas company 76[25].

iii) The Diversification of Sports-Related Content and Channels

           With more people staying at home than ever before, digital marketers can reach captivated audiences who are seeking alternative forms of entertainment. For instance, when live sporting events were not being broadcasted, networks such as Fox Sports and ESPN ran alternative programming, including classic games, archived content, and docuseries such as The Last Dance[26], which revolved around the career of Michael Jordan, and reached a record-breaking audience across the world, averaging 5.8M viewers across its first six episode premieres on ESPN[27]. Broadcasters are also showing eSports and niche competitions in a bid to keep consumers watching.[28] The NFL is even making every game since 2009 available for streaming on its direct-to-consumer (“D2C”) channel Game Pass, which led to a 500-fold increase in daily sign-ups for the service.[29] These D2C services are certainly appealing, having no fixed schedule and a rich volume of content to keep the consumer base engaged.[30]

           Similarly, there is an opportunity for teams and leagues who have developed their own over-the-top (“OTT”) subscription services. Many, such as the NBA, NFL, and Formula 1, have offered free short-term use of their premium and exclusive OTT services, which can serve as a way of entertaining, retaining, and ideally increasing their fan base.[31]

           This pandemic has also underscored the necessity to explore a variety of income streams, which could include live monetization models, such as gamified viewership.[32] This can include live payments for exclusive digital items, additional camera angles and in-game features, fan commentary and engagement, and statistical analysis, as a number of methods to offer a viewing premium.[33]

           iv) New Physical Marketing Avenues

           Ironically enough, during a time where virtual reality and technology is at the forefront of growth in the world of sports marketing, new physical marketing avenues have come to light. In the NHL, a number of teams have already reached helmet advertisement deals, and it is reasonable to expect each team will have their respective sponsor in the near future, with the NHL striving to raise USD$15M combined out of selling helmet ads.[34] Although critics may claim this is a temporary move to mitigate losses caused by COVID-19, the NBA has had ads on its jerseys for years prior to the pandemic, and one could very reasonably argue the NHL will even follow suit with jersey ads.[35]

           For generations, face masks have prevailed on the streets in China and Japan, worn during cold and flu season, as protection from pollution and allergens, and more recently as fashion statements. [36] What started here as a necessity to protect oneself from COVID-19, it can certainly be argued that face masks are here to stay – at least for the short term – and they are quickly becoming a form of expression, with companies ranging from Disney to Dior getting in on the action.[37] Fanatics, the popular online sports merchandise retailer, is now selling team-specific, officially licensed face masks for teams across the MLB, NBA, NFL, NHL, and WNBA, with a portion of proceeds from the sale of these masks being donated to select charities.[38] This initiative, which will serve as another revenue stream all while giving back to charities in need, could serve as a precursor for the marketing of other complimentary products, such as sanitizers or wipes that consumers often carry with them at all times.

           Conclusion

           Nelson Mandela once said, “Sport has the power to change the world. It has the power to inspire. It has the power to unite people in a way that little else does.”[39] Now more than ever, the world needs sports and a sense of unification in these trying times. COVID-19 has certainly rocked the world at large, and consequently, the sports marketing and sponsorship industry; however, through opportunism, responsiveness, and in an attempt to unite us, the sports world has unexpectedly innovated, through addressing (i) the captive audience migrating to social media; (ii) the continued rise in virtual and immersive technologies; (iii) the diversification of sports-related content and channels; and (iv) new physical marketing avenues. Beyond solely considering financial gain, organizations and athletes are also finding ways to give back in order to further support communities. For instance, FC Barcelona has agreed to sell the naming rights for the 2020-21 season to its famed Camp Nou for the first time in the venue’s history, with proceeds going towards COVID-19 relief.[40] Two-time NBA champion Pau Gasol acknowledges that athletes are role models in society, stating, “Let’s utilize that in a time of need like this one in order to send the right message, in order to do the right thing, in order to unite and bring the best out of people in a time of uncertainty and adversity.” Gasol is working with UNICEF, the Red Cross and the Gasol Foundation to encourage people, especially kids, to remain active and engaged during these difficult times.[41]

           It has not been an easy time for most – and it will continue to be an uphill battle – but in the pursuit of connection and unity, it is refreshing to know that resilience has bred a silver lining in the world of sports marketing. 

[1] https://www.investmentexecutive.com/news/research-and-markets/how-the-sports-business-is-adapting-to-pandemic-conditions/

[2] https://sponsorship.org/covid-19s-impact-on-sport/

[3] https://www.marketingdive.com/news/coronavirus-sports-marketing-covid-19/574932/

[4] https://velocitize.com/2020/05/27/the-state-of-sports-marketing-to-stay-at-home-fans/

[5] https://www.washingtonpost.com/sports/2020/06/04/games-will-come-back-will-corporate-sponsorships-marketing-campaigns/

[6] Supra, note 3.

[7] https://www.sportsbusinessdaily.com/SB-Blogs/COVID19-OpEds/2020/06/10.aspx

[8] https://groupmp15170118135410.blob.core.windows.net/cmscontent/2020/06/The-impact-of-COVID-19-on-sport.pdf

[9] https://www.newsbreak.com/news/1553714837627/bud-light-seltzer-is-hosting-the-first-ever-virtual-nfl-after-party-drafterparty-ft-lil-wayne-dj-khaled-more

[10] https://www.espn.com/nfl/story/_/id/29101466/virtual-nfl-draft-draws-55-million-viewers-league-says

[11] https://www.globaldata.com/covid-19-outbreak-sees-number-of-sponsorship-deals-fall-by-40-in-just-two-months/

[12] https://www.marketwatch.com/press-release/the-impact-of-covid-19-on-e-sports-market---growth-trends-industry-outlook-growth-opportunity-business-growth-and-forecast-2020---2026-2020-11-18

[13] https://www.nascar.com/news-media/2020/03/26/nascar-iracing-what-you-need-to-know-about-getting-started/

[14] https://www.enascar.com/coca-cola-iracing-series/

[15] https://esportsinsider.com/2020/02/coca-cola-enascar-iracing-series/

[16] https://www.impactplus.com/blog/coronavirus-pandemic-sports-fans-and-advertisers

[17] https://www.digitaltveurope.com/2020/05/05/inaugural-epremierleague-invitational-nets-150-million-viewers/

[18] https://www.premierleague.com/epl

[19] https://www.wpp.com/wpp-iq/how-sponsors-can-navigate-covid-19

[20] https://voice.mktgagency.ca/master-blog/categoryvoice/20/reengagingsportsfans

[21] https://www.espn.com/mlb/story/_/id/29367236/giants-program-display-cutout-images-fans-stands

[22] https://www.impactplus.com/blog/coronavirus-pandemic-sports-fans-and-advertisers

[23] Supra, note 20.

[24] https://www.sportsbusinessdaily.com/SB-Blogs/COVID19-OpEds/2020/06/10.aspx

[25] https://dodgerblue.com/rsvp-los-angeles-dodgers-holiday-zoom-party/2020/12/15/

[26] https://velocitize.com/2020/05/27/the-state-of-sports-marketing-to-stay-at-home-fans/

[27] https://espnpressroom.com/us/press-releases/2020/05/the-last-dance-continues-impressive-run-averages-5-8-million-viewers-across-first-6-episode-premieres/#:~:text=Episodes%205%20and%206%20Average%205.5%20Million%20Viewers&text=%E2%80%9CThe%20Last%20Dance%E2%80%9D%20continues%20to,Know%20Bo%E2%80%9D%20in%202012.

[28] https://www.weforum.org/agenda/2020/04/sports-covid19-coronavirus-excersise-specators-media-coverage/

[29] Ibid.

[30] Ibid.

[31] Supra, note 8.

[32] Supra, note 27.

[33] https://www.sportspromedia.com/from-the-magazine/gamification-esports-ar-nextvr-nba-interactive-netflix-twitch-bandersnatch

[34] forbes.com/sites/mattkalman/2020/12/23/dont-let-nhl-helmet-ads-offend-you-now-because-theyre-just-the-start/?sh=763550422804  

[35] Ibid.

[36] https://www.washingtonpost.com/lifestyle/style/masks-fashion-style-designs/2020/05/04/6a1b77a6-8a2c-11ea-ac8a-fe9b8088e101_story.html

[37] Ibid.

[38] https://www.insider.com/fanatics-team-face-masks

[39] https://www.forbes.com/sites/michaellore/2020/05/19/the-importance-of-sports-amid-the-coronavirus-pandemic-continues-to-be-emphasized/?sh=53ea190a30f6&fbclid=IwAR0tNjeFtTibOC04_bzyRn0hLUsMtCTpGpFmTuyH9iv6V-pVy5nqBf2iBkA

[40] https://www.forbes.com/sites/michaellore/2020/05/19/the-importance-of-sports-amid-the-coronavirus-pandemic-continues-to-be-emphasized/?sh=53ea190a30f6&fbclid=IwAR0tNjeFtTibOC04_bzyRn0hLUsMtCTpGpFmTuyH9iv6V-pVy5nqBf2iBkA

[41] Ibid.