Not All Sponsorship Is Fair in COVID and 2020

2020 has been a year.

It’s not hyperbole to say 2020 has been one of the most unimaginably difficult years that anyone in our industry has ever seen. And we’re only two-thirds of the way through it!

I don’t know about you, but everyone I hear from expresses exhaustion with no time for rest—we’re either in triage mode or hastily preparing for another kick to the gut.

Before COVID-19, sports were unequivocally viewed as transcendent and above all else. As engines of unity and as voices for change, sports have long been a core part of our communities.

Sports have been the way to help Americans recover from everything from national tragedies to the stress of our everyday lives.

Sure, sports paused in 2001 for nearly a week after 9/11, but just as quickly as they stopped, athletes and teams returned to play. Six days later, ailing St. Louis Cardinals announcer Jack Buck brought down Busch Stadium with a poem he wrote ( welcoming baseball back.

Barely six weeks later, President George W. Bush walked onto the field at Yankee Stadium for Game 3 of the World Series to throw a first pitch strike. Showered in “U-S-A” chants, who didn’t have that seared into their brain?

After Hurricane Katrina…the Boston Marathon bombing…the Las Vegas concert shooting…and too many other tragedies to list, sports were always right there.

Games acted as a security blanket to bring us comfort and a distraction. Sport’s welcoming arms embraced us, gave us strength and restored a sense of community.

In comparison, sports today are not holding the same place as America tries to mitigate—and bounce back from—the impact of the coronavirus. The TV ratings reflect that.

To come clean, it’s hard to live-and-die by the archaic measurement that ratings provide. For one, they don’t adequately show how people consume sports in the modern era. Still, for the sake of curiosity, we have to wonder why these ratings are the way they are.

Can fans not bear watching a fan taking a foul ball to the face? Are viewers suddenly realizing that those cutouts haven’t moved in weeks?

Or, like me, are they too busy trying to figure out if that fake fan noise is a recorded track or artificial intelligence reacting to the momentum of the game in real time? (Seriously, if anyone has the answer, please let me know).

Whatever it is, sports just aren’t having the same impact as we look to find a sense of normalcy in these (don’t say it…don’t say it…) unprecedented times.

The truth? This lag in engagement and execution from disrupted seasons and empty stadiums impacts both properties and their sponsors across practically every category. Though in some cases, let’s be very up front and say that these relationships are, to put it nicely, completely f*cked.

In an attempt to lay blame, raise your hand if you ever expected sponsorship contracts would ever need a pandemic clause within force majeure? OK, put your hand down because you’re lying. Seriously, that clause was only there to satisfy hyper-vigilant lawyers, not because it was applied in practice.

Yet, here we are – enacting force majeure, trying to maintain the quality of relationships while trying to get maximum value to the original budget, all with a hodgepodge of assets that we never thought we’d see:

Is it Audi Field at Yankee Stadium? No, it’s 2020.Yankees

The point? Nobody was prepared for this.

There was no real plan in place. “Solutions” came together in just days, with properties given mere hours to react. In turn, sponsoring brands, who we all can attest normally like to take their sweet time with these decisions, were faced with shrinking planning times from six months to less than six days.

Sure, some of these assets rushed to market are no-brainers and we hope they stick around – the MLS left sleeve logo placement has been a win, for example – but sponsors were given so little time to respond that it became a real mess for teams.

Teams had to hastily either sell assets (or offer them as makegoods) to multiple partners at a time. I witnessed assets sold to one partner, leading to them being yanked out from under other partners who were interested and (hurriedly) mulling them over.

It’s not that I don’t empathize with properties put in tough positions with painfully quick deadlines, but in the process of going through this myself, it was disheartening. Basically, our partners had to choose which relationship they were more willing to hurt.

Often times – and again understandably so – properties favored the sponsor whose contract is up for renewal over partners with multiple years remaining. Politically, it makes sense: worry first about retaining partners closest to going out the door. You’ll have time later to make up with those “stuck” with you.

There simply aren’t enough unsold assets to cover all the makegood value properties need to provide. This deficit puts everyone in terrible, no win positions.

And to think I haven’t even mentioned the actual economic impacts of COVID-19 on these relationships.

Are any of your larger partners in the hospitality, travel, tourism, retail, gym, or amusement park categories? They’re not exactly in a place to pay out those seven figure deals right now, nor are they going to be anytime soon.

But wait! There’s more!

Most egregious, though, are the furloughs and layoffs that have continued to come at the hands of billionaire owners. Sure, early on no one was sure of what was going to happen, but as we have seen, pro leagues and teams were hell-bent to make their seasons work no matter what. There was too much revenue on the line with media rights deals.

Truthfully, many ticketing and other commission-based employees were actually better off financially under the CARES Act between the $600 per week stipend and the, well, utter lack of tickets to sell. Handing out temporary furloughs or layoffs for those between seasons, while not ideal for the employee, is not what is outrageous.

As long as rights fees are still coming in to any extent, there is no reason for an owner to not pony up the funds to ensure that a sponsorship is being serviced accordingly. Go ahead and call me a “sports socialist” or heck, even “the Bernie Sanders of sports business,” it doesn’t matter. The truth is this – when you bring on a sponsor you bring on a partner.

Partners rely on their sponsorship contacts to understand their brand, their objectives and every little in-and-out of what goes on inside their company. These team staff are extensions of not just the property but the sponsor as well. They’re the people brand partners talk to the most in their day-to-day work. When you treat them poorly, sponsors see that and take note of how you treat your own people and allocate their dollars.

And that’s not just true about a team’s employees. It’s just as true about their fans, about their sponsors and about their communities. The public doesn’t always see this, but the people signing the checks and renegotiating the deals do.

Savvy contacts with key partners will remember what transpired in 2020 (and into 2021), making note of which properties not only treated them like true partners, but also took care of their own people. As the economy recovers, property leaders who don’t embody trust in the relationship will see a day where they can’t lean on the trust of their partners or even their own employees.

Read Lee Williams’ other recent contributions to TMR, a four-part series on cannabis in sports business, a.k.a. #SportsCannaBiz:

Part I: Cannabis Sports Landscape
Part II: Team Trailblazers
Part III: The Role of Brands
Part IV: Sponsorship Match Game

Lee Williams is a pseudonym for an experienced sports marketing professional currently working in an organization that forbids cannabis interactions—no marketing engagement, no financial partnerships and no recreational use by employees. S/he has worked to become a subject matter expert inspired in part by the life-changing medicinal use of cannabis and CBD for chronic pain several years ago.