The most optimistic spin even the most sanguine sales type can put on the sports sponsorship market these days is that things are “OK.”
A glut of new sponsorship inventory and an overriding concern about the economy has the appetite for new sponsorship assets in the deep freeze. Buyers, generally timid in the best of times, find the economy “uncertain” at best. And this is a breed that has always preferred definitively good or bad economic news to murkiness.
Still, at a time when many of those uniform patches and camera-visible assets are going unsold, high-end hospitality is surging as never before. At Sports Business Journal’s recent Drive conference in St. Louis, one after another, property types repeated the new coda, “whatever high-end hospitality we can make, we can sell.”
Our most vital question is always why. High-end hospitality is still pricey, though not as much as high-end sponsorship, often packaged with hospitality assets.
Excel Sports Management CBO Emilio Collins said his company’s hospitality and experiential marketing businesses are at record levels, and he noted the unprecedented demand for premium tickets and hospitality to events like the U.S. Open, the upcoming F1 race in Las Vegas and even regular-season NFL games.
“There’s still pent-up demand from the pandemic, but there’s also a newfound realization on the value of experiences for consumers and B2B,” Collins said.
“The interesting question is how much hospitality is eating into sponsorship budgets. We’re definitely seeing that anecdotally.”
Luxury hospitality opportunities like the Super Bowl are in demand.getty images
Properties have picked up on the demand. “At Wrigley, the experience has always been a premium, and we’ve leaned into that,” said Alex Seyferth, Cubs VP of corporate partnerships. “But we all sense that there’s still a COVID factor making hospitality more in demand than ever.”
Added MLB CRO Noah Garden, “Companies like [MLB corporate sponsors] Bud and Chevy have been doing this forever, but there’s more focus from clients now on hospitality and access. It’s causing potential partners which have never invested in sports to knock on our doors.”
Consequently, there’s more kinds of hospitality and more sellers.
“For a lot of brands, experiences are more important than a logo right now,” said Dan Griffis, president of global partnerships at Oak View Group. Accordingly, “inventory has changed. It used to be that everyone had a suite and maybe you could finagle a few Masters badges for your best clients. Now, everyone has a white glove, concierge version of that.”
QuintEvents’ offerings for the November F1 race in Vegas range per person from $4,500 to $25,000 for Paddock Club hospitality. “We’re seeing more levels of hospitality than ever and more sellers,” said Executive Chairman Brian Learst. “My sense is there’s a general feeling of an economic downturn coming, with a question as to what degree. In that case, companies generally look to shore up their best customer relationships and not focus as much on new business development and brand building. They are saving money on the brand building side and opting more for one-on-one relationship building, as opposed to communicating with the mass market.”
Cadence Solution Partners works with lifestyle properties, including Head of the Charles, Spartan Race and the World Surf League.
“There’s a focus from brands wanting more hospitality and experiences as a major part of their sponsorship engagements and often as the main asset,” said Jeff Doyle, managing partner.
“It provides much higher engagement ROI and has an ability to directly connect with existing and new customers with more authenticity and purpose.”
If we are in or just before an economic downturn — or even when that’s only the prevailing mood — accountability becomes paramount. In that sort of scenario, hospitality’s more definitive costs and accountability can trump sponsorship and branding. Whereas it’s difficult to liquidate sponsorship assets, hospitality is more akin to cash.
“Hospitality doesn’t come with a marketing obligation — it’s always been more nimble and flexible than branding inventory,” said Genesco Sports Enterprises head John Tatum. “At a time when budgets might be getting tighter, that becomes more important. It doesn’t come with a marketing obligation, there’s better cost efficiencies and its easier to create an ROI model for.
“If I want to get product on NFL sidelines, that’s valuable, but costly, and there’s one way in. If a client wants to host an event around a Taylor Swift concert, there’s a thousand options and you don’t need to be a league partner.”
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com
